-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WUJdq0uJJwAL0RbZnCmZO5sSyYDQQ8snP1VHWGZ+ju/6+abFUS6WGEVQC42mJcbD 4Gg4aZ1Tv8M+pLXv+M0yrg== 0000950144-00-014564.txt : 20001201 0000950144-00-014564.hdr.sgml : 20001201 ACCESSION NUMBER: 0000950144-00-014564 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONS FUNDS TRUST CENTRAL INDEX KEY: 0001097519 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-09645 FILM NUMBER: 781292 BUSINESS ADDRESS: STREET 1: ONE BANK OF AMERICA PLAZA CITY: CHARLOTTE STATE: NC ZIP: 28255 BUSINESS PHONE: 8003217854 MAIL ADDRESS: STREET 1: ONE BANKOF AMERICA PLAZA CITY: CHARLOTTE STATE: NC ZIP: 28255 N-30D 1 g64503fsn-30d.txt FUNDS TRUST (INTERNATIONAL) 1 [GRAPHIC: PHOTO COLLAGE WITH CELL PHONE] Nations International Value Fund Nations International Equity Fund Nations Marsico International Opportunities Fund Nations Emerging Markets Fund INTERNATIONAL STOCK FUNDS SEMIANNUAL REPORT FOR THE PERIOD ENDED SEPTEMBER 30, 2000 [NATIONS FUNDS LOGO] 2 This Report is submitted for the general information of shareholders of Nations Funds. This material must be preceded or accompanied by a current Nations Funds prospectus. Nations Funds distributor: Stephens Inc., which is not affiliated with Bank of America N.A., is not a bank, and securities offered by it are not guaranteed by any bank or insured by the FDIC. Stephens Inc., member NYSE, SIPC. Nations Funds Investment adviser: Banc of America Advisors, Inc. NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE 3 PRESIDENTS' MESSAGE Dear Shareholder: The six-month period ended September 30, 2000 proved to be quite unsettling for mutual fund investors. Several factors led to turbulence in U.S. and overseas markets. The Federal Reserve Board's practice of increasing interest rates in an attempt to slow down the economy and keep inflation at bay took a toll on the stock market. Oil prices soared over the summer causing concern across the country as several cities saw gas prices above $2.00 per gallon. The slowing economy affected earnings at a number of leading U.S. companies, causing additional volatility in the stock market. Overseas, the European Central Bank raised interest rates in August -- the fifth rate hike this year -- and the euro fell to a record low. In Japan, the Bank of Japan increased interest rates for the first time in a decade, adding additional strain to an economy that has struggled over the last several years. The only seemingly bright spot for investors during the past six months has been in the bond market. Because of the federal government's budget surplus, the U.S. Treasury has had to buy back many of its long-term securities. The shortage in long-term securities has generally increased returns on these securities, resulting in an inversion of the yield curve -- whereby short-term securities are yielding more than many longer-term securities. This is the first time in a long time that most bond sectors have outperformed both the Standard & Poor's 500 Composite Stock Price Index and the Nasdaq Composite Index*. Now, you're probably asking yourself "Is this a good time to invest in stocks or bonds?" We think the answer is "Yes." While stocks of all sizes have historically outperformed bonds over the long-term, and bonds have performed well this year, a broadly diversified portfolio -- one consisting of both stocks and bonds -- can help you weather market volatility. Remember that the financial markets tend to be cyclical and while one asset class or investment style may be the flavor of the month, it could be out of favor the next. It's also important to note that volatility tends to keep some investors on the sidelines. But waiting for the right time to invest may result in missed opportunities. Disciplined investing requires staying invested through market highs and lows. Investors can also take advantage of dollar cost averaging** during volatile times -- the practice of systematic investing where you seek to buy more shares when prices are low and fewer shares when prices are high, resulting in a lower average share price over time. Remaining invested and regularly investing is key. Whether it's growth vs. value, large cap vs. small cap, stocks vs. bonds, or U.S. vs. international, no single investment style alone will assure that you achieve your long-term financial goals. We believe diversification is the key to long-term success and an investment professional can help you create a portfolio best suited to your risk tolerance and investment time horizon. *The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of 500 widely held common stocks. It is unavailable for investment. The Nasdaq Composite Index tracks the performance of domestic common stocks traded on the regular Nasdaq market as National Market System traded foreign stocks and ADRs. It is unmanaged and unavailable for investment. **Dollar cost averaging does not ensure a profit or protect against a loss in a declining market. You should carefully consider your ability to make regular investments through periods of fluctuating market conditions. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 4 PRESIDENTS' MESSAGE CONTINUED... At Nations Funds, we strongly believe in the value of advice. An investment professional can provide you with market research and analysis, years of investment experience, and work with you to determine the best strategy for surviving short-term volatility and successfully reaching your long-term goals. We remain committed to providing you with world-class investment management and competitive products to help you reach your long-term goals. Should you have any questions or comments on your semiannual report, please contact your investment professional or call us at 1.800.321.7854. You can also visit us online at www.nations-funds.com. Thank you for being a part of the Nations Funds family. Sincerely, /s/ A. Max Walker A. MAX WALKER PRESIDENT AND CHAIRMAN OF THE BOARD NATIONS FUNDS /s/ Robert H. Gordon ROBERT H. GORDON PRESIDENT BANC OF AMERICA ADVISORS, INC. September 30, 2000 5 TABLE OF CONTENTS NATIONS FUNDS SPECTRUM 2 FINANCIAL STATEMENTS Statements of net assets Nations International Value Fund 3 Nations International Equity Fund 4 Nations Marsico International Opportunities Fund 5 Nations Emerging Markets Fund 8 Statements of operations 11 Statements of changes in net assets 12 Schedules of capital stock activity 14 Financial highlights 18 Notes to financial statements 26 Statements of net assets -- Nations Master Investment Trust Nations International Value Master Portfolio 33 Nations International Equity Master Portfolio 36 Statements of operations 41 Statements of changes in net assets 42 Supplementary data 42 Notes to financial statements 43
------------------------------------------------------------------------------ NATIONS FUNDS [DALBAR LOGO] RECOGNIZED FOR OUTSTANDING DALBAR, Inc., is a well-respected CUSTOMER SERVICE research firm that measures customer service levels and IN RECOGNITION OF ITS COMMITMENT TO establishes benchmarks in the PROVIDE SHAREHOLDERS WITH THE financial services industry. HIGHEST LEVEL OF CUSTOMER SERVICE IN THE MUTUAL FUND INDUSTRY, NATIONS FUNDS RECEIVED THE DALBAR MUTUAL FUND SERVICE AWARD IN 1999. ------------------------------------------------------------------------------
6 THE NATIONS FUNDS FAMILY OF FUNDS LOWER RISK/REWARD POTENTIAL MONEY MARKET FUNDS Nations Prime Fund Nations Cash Reserves Nations Money Market Reserves Nations Government Money Market Fund Nations Government Reserves Nations Treasury Fund Nations Treasury Reserves Nations Tax Exempt Fund Nations Municipal Reserves Nations California Tax-Exempt Reserves FIXED INCOME FUNDS INCOME FUNDS Nations High Yield Bond Fund Nations Strategic Income Fund Nations U.S. Government Bond Fund Nations Government Securities Fund Nations Bond Fund Nations Intermediate Bond Fund Nations Short-Intermediate Government Fund Nations Short-Term Income Fund TAX-EXEMPT INCOME FUNDS Nations Municipal Income Fund Nations State-Specific Long-Term Municipal Bond Funds (CA, FL, GA, KS, MD, NC, SC, TN, TX, VA) Nations Intermediate Municipal Bond Fund Nations State-Specific Intermediate Municipal Bond Funds (FL, GA, MD, NC, SC, TN, TX, VA) Nations Short-Term Municipal Income Fund DOMESTIC EQUITY FUNDS GROWTH FUNDS Nations Small Company Fund Nations Marsico 21st Century Fund Nations MidCap Growth Fund Nations Marsico Focused Equities Fund Nations Aggressive Growth Fund Nations Capital Growth Fund Nations Strategic Growth Fund Nations Blue Chip Fund GROWTH AND INCOME FUNDS Nations Marsico Growth & Income Fund Nations Value Fund Nations Equity Income Fund Nations Asset Allocation Fund Nations Balanced Assets Fund Nations Convertible Securities Fund INTERNATIONAL FUNDS Nations Emerging Markets Fund Nations Marsico International Opportunities Fund Nations International Equity Fund Nations International Value Fund HIGHER RISK/REWARD POTENTIAL INDEX FUNDS Nations Managed Index Fund Nations LargeCap Index Fund Nations MidCap Index Fund Nations SmallCap Index Fund ASSET ALLOCATION PORTFOLIOS Nations LifeGoal Balanced Growth Portfolio Nations LifeGoal Growth Portfolio Nations LifeGoal Income and Growth Portfolio 2 7 NATIONS FUNDS Nations International Value Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE (000) - ---------------------------------------------------------- INVESTMENT COMPANIES -- 100.0% Investment in Nations Master Investment Trust, International Value Master Portfolio*........ $1,249,342 ---------- TOTAL INVESTMENTS......... 100.0% 1,249,342 ---------- OTHER ASSETS AND LIABILITIES (NET)....... 0.0% Administration fee payable....... $ (170) Shareholder servicing and distribution fees payable...... (130) Accrued Trustees' fees and expenses....................... (20) Accrued expenses and other liabilities.................... (121) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET).............. (441) ---------- NET ASSETS................ 100.0% $1,248,901 ========== NET ASSETS CONSIST OF: Undistributed net investment income......................... $ 212 Accumulated net realized gain on investment..................... 291 Net unrealized appreciation of investment..................... 60,181 Paid-in capital.................. 1,188,217 ---------- NET ASSETS....................... $1,248,901 ========== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($868,371,773 / 47,397,782 shares outstanding)............ $18.32 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($286,394,659 / 15,657,404 shares outstanding)................... $18.29 ====== Maximum sales charge............. 5.75% Maximum offering price per share.......................... $19.41 INVESTOR B SHARES: Net asset value and offering price per share(+) ($70,447,527 / 3,881,733 shares outstanding)................... $18.15 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($23,687,349 / 1,305,108 shares outstanding)................... $18.15 ======
- --------------- * The financial statements of the International Value Master Portfolio, including its portfolio of investments, are included elsewhere within this report and should be read in conjunction with the International Value Fund's financial statements. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. SEE NOTES TO FINANCIAL STATEMENTS. 3 8 NATIONS FUNDS Nations International Equity Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE (000) - ---------------------------------------------------------- INVESTMENT COMPANIES -- 100.0% Investment in Nations Master Investment Trust, International Equity Master Portfolio*....... $1,042,725 ---------- TOTAL INVESTMENTS......... 100.0% 1,042,725 ---------- OTHER ASSETS AND LIABILITIES (NET)....... 0.0% Administration fee payable....... $ (144) Shareholder servicing and distribution fees payable...... (33) Accrued Trustees' fees and expenses....................... (83) Accrued expenses and other liabilities.................... (162) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET).............. (422) ---------- NET ASSETS................ 100.0% $1,042,303 ========== NET ASSETS CONSIST OF: Distributions in excess of net investment income.............. $ (3,187) Accumulated net realized gain on investment..................... 15,267 Net unrealized appreciation of investment..................... 45,509 Paid-in capital.................. 984,714 ---------- NET ASSETS....................... $1,042,303 ========== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($942,565,089 / 70,228,505 shares outstanding)............ $13.42 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($70,309,189 / 5,319,836 shares outstanding)................... $13.22 ====== Maximum sales charge............. 5.75% Maximum offering price per share.......................... $14.03 INVESTOR B SHARES: Net asset value and offering price per share+ ($28,146,396 / 2,199,366 shares outstanding)................... $12.80 ====== INVESTOR C SHARES: Net asset value and offering price per share+ ($1,282,413 / 102,657 shares outstanding).... $12.49 ======
- --------------- * The financial statements of the International Equity Master Portfolio, including its portfolio of investments, are included elsewhere within this report and should be read in conjunction with the International Equity Fund's financial statements. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. SEE NOTES TO FINANCIAL STATEMENTS. 4 9 NATIONS FUNDS Nations Marsico International Opportunities Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ----------------------------------------------------------- COMMON STOCKS -- 84.5% BRAZIL -- 3.0% 6,202 Embraer-Empresa Brasileira de Aeronautica SA........................ $ 192 ------- CANADA -- 15.0% 6,134 BCE, Inc. .............................. 143 10,504 Bombardier, Inc. ....................... 181 2,980 Bonavista Petroleum Ltd.(!)............. 56 2,512 Celestica Inc.(!)....................... 173 2,932 Clarica Life Insurance Company(!)....... 70 1,371 Four Seasons Hotels Inc. ............... 100 4,175 Petro-Canada............................ 93 3,661 The Thomson Corporation................. 145 ------- 961 ------- DENMARK -- 2.7% 765 Novo Nordisk AS-B....................... 170 ------- FRANCE -- 11.5% 2,133 Alcatel................................. 136 2,083 Aventis................................. 156 1,396 Axa(!).................................. 142 1,048 Groupe Danone........................... 144 1,019 Schlumberger Ltd. ...................... 84 497 Total Fina Elf SA....................... 73 ------- 735 ------- HONG KONG -- 2.7% 13,000 Hutchison Whampoa....................... 173 ------- IRELAND -- 12.0% 12,016 Allied Irish Banks plc.................. 131 16,093 Bank of Ireland......................... 129 3,361 Elan Corporation, ADR(!)................ 184 39,581 Parthus Technologies plc(!)............. 158 7,281 Riverdeep Group plc(!).................. 162 ------- 764 ------- JAPAN -- 7.1% 521 Nippon Telegraph & Telephone Company, ADR................................... 26 8 Nippon Telegraph and Telephone Company............................... 78 5 NTT Docomo Inc. ........................ 143 1,500 Sony Corporation........................ 153 540 Sony Corporation, ADR................... 55 ------- 455 ------- NETHERLANDS -- 8.5% 5,328 ASM Lithography Holding NV(!)........... 177 3,205 ING Groep NV............................ 213 475 Koninklijke (Royal) Philips(!).......... 20 3,201 Nortel Networks Corporation............. 191 3,122 Philips Electronics NV.................. 134 ------- 735 ------- SWEDEN -- 1.7% 7,012 LM Ericsson AB(!)....................... 107 ------- SWITZERLAND -- 3.4% 22 Julius Baer Holdings, Ltd. ............. 114 53 Schweizerische Rueckversicherungs-Gesellschaft (REGD)................................ 101 ------- 215 -------
VALUE SHARES (000) - ----------------------------------------------------------- UNITED KINGDOM -- 13.9% 30,039 ARC International plc(!)................ $ 182 19,195 Diageo plc.............................. 172 1,499 Pearson plc............................. 42 6,456 Reuters Group plc(!).................... 122 12,869 Sema Group plc(!)....................... 221 4,198 Shire Pharmaceuticals Group plc(!)...... 72 1,430 Shire Pharmaceuticals, ADR(!)........... 74 ------- 885 ------- TOTAL COMMON STOCKS (Cost $5,448)......................... 5,392 -------
PRINCIPAL AMOUNT (000) - --------- U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 11.0% (Cost $700) $ 700 Discount note due 10/02/00.............. 700 ------- SHARES (000) - --------- INVESTMENT COMPANIES -- 0.8% (Cost $50) 50 Nations Cash Reserves#.................. 50 ------- TOTAL INVESTMENTS (Cost $6,198*)................. 96.3% 6,142 ------- OTHER ASSETS AND LIABILITIES (NET).......................... 3.7% Cash.................................... $ 148 Receivable for investment securities sold.................................. 2,238 Dividends receivable.................... 3 Receivable from administrator........... 32 Prepaid expenses........................ 34 Investment advisory fee payable......... (4) Shareholder servicing and distribution fees payable.......................... (2) Payable for investment securities purchased............................. (2,212) Accrued Trustees' fees and expenses..... (1) ------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................................. 236 ------- NET ASSETS....................... 100.0% $ 6,378 ======= NET ASSETS CONSIST OF: Undistributed net investment income..... $ 1 Accumulated net realized loss on investments sold, foreign currencies and net other assets.................. (19) Net unrealized depreciation of investments, foreign currencies and net other assets...................... (52) Paid-in capital......................... 6,448 ------- NET ASSETS.............................. $ 6,378 =======
SEE NOTES TO FINANCIAL STATEMENTS. 5 10 NATIONS FUNDS Nations Marsico International Opportunities Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE - ------------------------------------------------------------ PRIMARY A SHARES: Net asset value, offering and redemption price per share ($1,518,824 / 151,492 shares outstanding)................... $10.03 ======= INVESTOR A SHARES: Net asset value and redemption price per share ($1,944,453 / 194,009 shares outstanding).......................... $10.02 ======= 5.75% Maximum sales charge.................... $10.63 Maximum offering price per share........ INVESTOR B SHARES: Net asset value and offering price per share(+)($1,987,905 / 198,629 shares outstanding).......................... $10.01 ======= INVESTOR C SHARES: Net asset value and offering price per share(+)($926,397 / 92,539 shares outstanding).......................... $10.01 =======
- --------------- * Federal Income Tax Information: Net unrealized depreciation of $56 on investment securities was comprised of gross appreciation of $350 and gross depreciation of $406 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $6,198. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 6 11 NATIONS FUNDS Nations Marsico International Opportunities Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED) At September 30, 2000, sector diversification was as follows: % OF NET VALUE SECTOR DIVERSIFICATION ASSETS (000) - -------------------------------------------------------------------------------------------------- Common stocks: Pharmaceuticals............................................. 10.2% $ 656 Semiconductors.............................................. 8.1 517 Networking and telecommunications equipment................. 6.8 434 Telecommunications services................................. 6.1 390 Commercial banking.......................................... 5.9 374 Electronics................................................. 5.7 361 Diversified manufacturing................................... 5.6 354 Insurance................................................... 4.9 313 Publishing and advertising.................................. 4.8 309 Computer services........................................... 3.5 221 Financial services.......................................... 3.3 213 Aerospace and defense....................................... 3.0 192 Electrical equipment........................................ 2.7 174 Beverages................................................... 2.7 172 Integrated oil.............................................. 2.6 166 Software.................................................... 2.5 162 Food products............................................... 2.3 144 Lodging and recreation...................................... 1.6 100 Oilfield services........................................... 1.3 84 Exploration and production.................................. 0.9 56 ---------- ------------- TOTAL COMMON STOCKS......................................... 84.5 5,392 U.S. GOVERNMENT AND AGENCY OBLIGATIONS...................... 11.0 700 INVESTMENT COMPANIES........................................ 0.8 50 ---------- ------------- TOTAL INVESTMENTS........................................... 96.3 6,142 OTHER ASSETS AND LIABILITIES (NET).......................... 3.7 236 ---------- ------------- NET ASSETS.................................................. 100.0% $ 6,378 ========== =============
SEE NOTES TO FINANCIAL STATEMENTS. 7 12 NATIONS FUNDS Nations Emerging Markets Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 93.3% ARGENTINA -- 2.5% 30,434 Grupo Financiero Galicia SA, ADR(!)............................ $ 457 47,525 Perez Companc SA, ADR(!)............ 778 -------- 1,235 -------- BRAZIL -- 13.3% 13,100 Brasil Telecom Part, ADR............ 763 840,000 Companhia de Bebidas das Americas (Ambev)........................... 924 32,000 Companhia Vale do Rio Doce, ADR..... 798 13,500,000 Eletropaulo Metropolitana........... 809 44,000 Embratel Participacoes, ADR......... 814 18,000 Pao de Acucar, ADR.................. 669 10,300 Petrol Brasileiros, ADR............. 295 48,502 Tele Norte Leste Participacoes, ADR............................... 1,109 10,000 Telesp Celular Participacoes SA, ADR............................... 329 -------- 6,510 -------- CHINA -- 0.7% 17,700 AsiaInfo Holdings, Inc.(!).......... 335 -------- GREECE -- 1.6% 52,000 STET Hellas Telecommunications SA, ADR(!)............................ 774 -------- HONG KONG -- 4.3% 75,000 Cheung Kong (Holdings) Limited...... 906 85,000 China (HK) Mobile(!)................ 564 48,600 Hutchison Whampoa................... 645 -------- 2,115 -------- HUNGARY -- 2.0% 16,400 Matav, ADR.......................... 386 11,000 Richter Geoeon, GDR................. 577 -------- 963 -------- INDIA -- 4.2% 57,000 ICICI Limited, ADR.................. 627 61,000 Reliance Industries Ltd., GDR(!).... 954 36,100 Satyam Infoway Limited, ADR......... 490 -------- 2,071 -------- ISRAEL -- 1.0% 61,200 Tioga Tech Ltd.(!).................. 509 -------- MALAYSIA -- 3.4% 670,000 AMMB Holdings Berhad................ 663 130,000 Globetronics Technology Berhad...... 257 210,000 Mesiniaga Berhad.................... 365 150,000 Telekom Malaysia Berhad............. 395 -------- 1,680 -------- MEXICO -- 14.8% 435,000 Carso Global Telecom, ADR........... 2,097 38,500 Consorcio Ara, ADR(!)(-)............ 624 81,800 Grupo Carso SA de CV, ADR(!)........ 489 65,000 Grupo Elektra, SA de CV, GDR........ 618 42,000 Grupo IMSA SA de CV, ADR............ 383 240,000 Grupo Industrial Bimbo.............. 402 240,000 Grupo Modelo........................ 559 7,500 Grupo Televisa SA, GDR(!)........... 433 45,000 TV Azteca, SA de CV, ADS............ 579 51,000 Walmart de Mexico SA de CV, ADR(!).. 1,067 -------- 7,251 --------
VALUE SHARES (000) - ------------------------------------------------------------ POLAND -- 3.6% 23,500 Agora SA, GDR(!).................... $ 450 55,000 Elektrim(!)......................... 496 33,418 Polski Koncern Naftowy Orlen SA, GDR(!)............................ 261 104,000 Telekomunikacja, GDR................ 533 -------- 1,740 -------- RUSSIA -- 3.3% 15,000 Mobile Telesystems, ADS(!).......... 381 124,000 Tatneft, ADR........................ 1,232 -------- 1,613 -------- SOUTH AFRICA -- 7.3% 22,000 Anglo American Platinum Corporation....................... 848 30,500 De Beers Centenary Link Units....... 847 135,000 Dimension Data Holdings plc(!)...... 1,252 28,000 Nedcor Limited...................... 602 -------- 3,549 -------- SOUTH KOREA -- 17.3% 69,000 Hyundai Electronics Industries Company(!)........................ 987 112,000 Hyundai Motor Company Ltd., GDR(!).. 790 6,650 Korea Telecom Free.................. 291 20,200 Korea Telecom, ADR.................. 679 100,000 LG Electronics Inc., GDS(!)(-)...... 973 12,500 Samsung Electronics................. 2,264 42,100 Shinhan Bank, GDR................... 928 58,060 SK Telecom Company, ADR............. 1,488 -------- 8,400 -------- TAIWAN -- 8.6% 110,800 Acer Comms, GDR..................... 1,118 69,435 Advanced Semiconductor, GDR......... 474 83,000 Asustek Computer Inc., GDR.......... 459 48 Asustek Computer, GDR(-)............ 0++ 9,000 Gigamedia Ltd.(!)................... 73 70,206 Siliconware Precision Industries Company........................... 352 85,552 Taiwan Semiconductor, ADR........... 1,743 -------- 4,219 -------- THAILAND -- 1.5% 46,000 Advanced Info Services (FGN)(!)..... 388 924,000 Siam Commercial Bank Public Company Limited(!)........................ 350 -------- 738 -------- TURKEY -- 3.9% 101,600,000 Haci Omer Sabanci Holding........... 824 22,400 Turkcell Iletisim, ADS(!)........... 246 119,460,000 Yapi Kredi Bankasi.................. 862 -------- 1,932 -------- TOTAL COMMON STOCKS (Cost $50,414)...................... 45,634 -------- PREFERRED STOCKS -- 2.9% BRAZIL -- 2.9% 121,415,518 Banco Bradesco Preferred............ 1,013 13,350 Petrol Brasileiros Preferred NPV.... 382 -------- 1,395 -------- TOTAL PREFERRED STOCKS (Cost $427)....................... 1,395 --------
SEE NOTES TO FINANCIAL STATEMENTS. 8 13 NATIONS FUNDS Nations Emerging Markets Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ RIGHTS -- 0.0%+ (Cost $0) BRAZIL -- 0.0%+ 1,000 Telesp Celular Participacoes SA, ADR Expire 10/12/00(!)................ $ 0++ -------- WARRANTS -- 0.0%+ BRAZIL -- 0.0%+ 59,969 Ambev Cia De Bebidas Expire 04/30/03(!)................ 13 4,990 Ambev Cia De Bebidas Expire 04/30/03(!)................ 1 -------- 14 -------- TOTAL WARRANTS (Cost $3)......................... 14 --------
SHARES (000) - ------------------------------------------------------------ INVESTMENT COMPANIES -- 10.4% 4,581 Nations Cash Reserves#............. 4,581 54 Taiwan Index Fund(!)............... 513 -------- TOTAL INVESTMENT COMPANIES (Cost $5,088).................... 5,094 -------- TOTAL INVESTMENTS (Cost $55,932*)........... 106.6% 52,137 -------- OTHER ASSETS AND LIABILITIES (NET)......... (6.6)% Cash............................... $ 172 Receivable for investment securities sold.................. 1,406 Receivable for Fund shares sold.... 1,236 Dividends receivable............... 103 Interest receivable................ 9 Line of credit payable............. (364) Collateral on securities loaned.... (4,581) Investment advisory fee payable.... (43) Administration fee payable......... (9) Shareholder servicing and distribution fees payable........ (3) Payable for investment securities purchased........................ (1,084) Accrued Trustees' fees and expenses......................... (18) Accrued expenses and other liabilities...................... (39) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)............................ (3,215) -------- NET ASSETS.................. 100.0% $ 48,922 ======== NET ASSETS CONSIST OF: Distributions in excess of net investment loss.................. $ (430) Accumulated net realized loss on investments sold, foreign currencies and net other assets........................... (14,860) Net unrealized depreciation of investments, foreign currencies and net other assets............. (3,795) Paid-in capital.................... 68,007 -------- NET ASSETS......................... $ 48,922 ========
VALUE - ------------------------------------------------------------ PRIMARY A SHARES: Net asset value, offering and redemption price per share ($44,332,859 / 3,930,320 shares outstanding)..................... $11.28 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($2,153,094 / 192,374 shares outstanding)..................... $11.19 ======== 5.75% Maximum sales charge............... $11.87 Maximum offering price per share... INVESTOR B SHARES: Net asset value and offering price per share(+) ($2,343,761 / 214,864 shares outstanding).............. $10.91 ======== INVESTOR C SHARES: Net asset value and offering price per share(+) ($92,026 / 8,445 shares outstanding).............. $10.90 ========
- --------------- * Federal Income Tax Information: Net unrealized depreciation of $3,795 on investment securities was comprised of gross appreciation of $4,678 and gross depreciation of $8,473 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $55,932. (-) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. + Amount represents less than 0.1%. ++ Amount represents less than $500. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. Represents cash collateral received from securities lending activity (Note 7). ADR -- American Depository Receipt ADS -- American Depository Shares GDR -- Global Depository Receipt GDS -- Global Depository Shares SEE NOTES TO FINANCIAL STATEMENTS. 9 14 NATIONS FUNDS Nations Emerging Markets Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED) At September 30, 2000, sector diversification was as follows: % OF NET VALUE SECTOR DIVERSIFICATION ASSETS (000) - -------------------------------------------------------------------------------------------------- Common stocks: Telecommunications services................................. 23.1% $ 11,237 Semiconductors.............................................. 12.9 6,329 Commercial banking.......................................... 7.0 3,405 Diversified electronics..................................... 5.7 2,807 Metals and mining........................................... 5.1 2,493 Department and discount stores.............................. 4.8 2,354 Software.................................................... 4.4 2,150 Diversified manufacturing................................... 4.1 1,982 Finance -- Miscellaneous.................................... 3.9 1,908 Real Estate................................................. 3.1 1,530 Beverages................................................... 3.0 1,483 Exploration and production.................................. 2.5 1,232 Broadcasting and cable...................................... 2.1 1,012 Electric power -- Non nuclear............................... 1.7 809 Automotive.................................................. 1.6 790 Oil and gas................................................. 1.6 778 Pharmaceuticals............................................. 1.2 577 Electrical equipment........................................ 1.0 496 Conglomerates............................................... 1.0 489 Publishing and advertising.................................. 0.9 450 Other....................................................... 2.6 1,323 ---------- ------------- TOTAL COMMON STOCKS......................................... 93.3 45,634 PREFERRED STOCKS............................................ 2.9 1,395 RIGHTS...................................................... 0.0+ 0++ WARRANTS.................................................... 0.0+ 14 INVESTMENT COMPANIES........................................ 10.4 5,094 ---------- ------------- TOTAL INVESTMENTS........................................... 106.6 52,137 OTHER ASSETS AND LIABILITIES (NET).......................... (6.6) (3,215) ---------- ------------- NET ASSETS.................................................. 100.0% $ 48,922 ========== ==============
- --------------- + Amount represents less than 0.1%. ++ Amount represents less than $500. SEE NOTES TO FINANCIAL STATEMENTS. 10 15 NATIONS FUNDS STATEMENTS OF OPERATIONS (UNAUDITED) For the six months ended September 30, 2000 INTERNATIONAL INTERNATIONAL INTERNATIONAL EMERGING VALUE EQUITY OPPORTUNITIES(A) MARKETS ----------------------------------------------------------------- (IN THOUSANDS) INVESTMENT INCOME: Dividends (Net of foreign withholding taxes of $0, $0, $1 and $21, respectively)..................... $ -- $ -- $ 5 $ 226 Dividends allocated from Portfolio (Net of foreign withholding taxes of $1,410, $1,244, $0 and $0, respectively)+.................................... 14,688 11,346 -- -- Interest............................................ -- -- 10 64 Interest allocated from Portfolio+.................. 2,519 1,552 -- -- Securities lending income........................... -- -- -- 52 Expenses allocated from Portfolio+.................. (5,179) (4,396) -- -- -------------- -------------- -------------- -------------- Total investment income......................... 12,028 8,502 15 342 -------------- -------------- -------------- -------------- EXPENSES: Investment advisory fee............................. -- -- 6 279 Administration fee.................................. 911 778 35 62 Transfer agent fees................................. 223 143 8 10 Custodian fees...................................... -- -- 8 21 Legal and audit fees................................ 30 38 14 37 Registration and filing fees........................ 102 52 18 49 Trustees' fees and expenses......................... 9 8 2 9 Amortization of organization costs.................. -- -- -- 8 Interest expense.................................... -- -- -- 3 Printing expense.................................... 63 46 -- 36 Other............................................... 3 9 19 -- -------------- -------------- -------------- -------------- Subtotal........................................ 1,341 1,074 110 514 Shareholder servicing and distribution fees: Investor A Shares................................. 300 48 1 3 Investor B Shares................................. 311 144 2 14 Investor C Shares................................. 88 5 1 1 -------------- -------------- -------------- -------------- Total expenses.................................. 2,040 1,271 114 532 Fees waived by investment advisor and/or administrator..................................... (537) -- (100) -- Fees reduced by credits allowed by the custodian.... -- -- --* -- -------------- -------------- -------------- -------------- Net expenses.................................... 1,503 1,271 14 532 -------------- -------------- -------------- -------------- NET INVESTMENT INCOME/(LOSS)........................ 10,525 7,231 1 (190) -------------- -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) from: Security transactions............................. -- -- (12) 2,894 Security transactions allocated from Portfolio+... (4,489) 17,762 -- -- Foreign currencies and net other assets........... -- -- (7) (15) Foreign currencies and net other assets allocated from Portfolio+................................. (71) (483) -- -- -------------- -------------- -------------- -------------- Net realized gain/(loss) on investments............. (4,560) 17,279 (19) 2,879 -------------- -------------- -------------- -------------- Change in unrealized appreciation/(depreciation) of: Securities (Note 9)............................... -- -- (56) (21,135) Securities allocated from Portfolio (Note 9)+..... 17,972 (154,167) -- -- Foreign currencies and net other assets........... -- -- 5 1 Foreign currencies and net other assets allocated from Portfolio+................................. (4) -- -- -- -------------- -------------- -------------- -------------- Net change in unrealized appreciation/(depreciation) of investments.................................... 17,968 (154,167) (51) (21,134) -------------- -------------- -------------- -------------- Net realized and unrealized gain/(loss) on investments....................................... 13,408 (136,888) (70) (18,255) -------------- -------------- -------------- -------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................................ $ 23,933 $ (129,657) $ (69) $ (18,445) ============== ============== ============== ==============
- --------------- * Amount represents less than $500. + Allocated from International Value Master Portfolio and International Equity Master Portfolio, respectively. (a) International Opportunities commenced operations on August 1, 2000. SEE NOTES TO FINANCIAL STATEMENTS. 11 16 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS
INTERNATIONAL VALUE ---------------------------------------- SIX MONTHS ENDED 9/30/00 YEAR ENDED (UNAUDITED) 3/31/00(a) ---------------------------------------- (IN THOUSANDS) Net investment income/(loss)................................ $ 10,525 $ 8,617 Net realized gain/(loss) on investments..................... -- 9,685# Net realized gain/(loss) on investments allocated from Portfolio+................................................ (4,560) 63,807 Net change in unrealized appreciation/(depreciation) of investments............................................... -- (979)# Net change in unrealized appreciation/(depreciation) of investments allocated from Portfolio+..................... 17,968 38,439 -------------- -------------- Net increase/(decrease) in net assets resulting from operations................................................ 23,933 119,569 Distributions to shareholders from net investment income: Primary A Shares.......................................... (7,586) (6,376) Primary B Shares.......................................... -- -- Investor A Shares......................................... (2,210) (1,624) Investor B Shares......................................... (390) (268) Investor C Shares......................................... (127) (77) Distributions to shareholders from net realized gain on investments: Primary A Shares.......................................... (31,588) (8,649) Primary B Shares.......................................... -- -- Investor A Shares......................................... (9,902) (2,023) Investor B Shares......................................... (2,657) (477) Investor C Shares......................................... (712) (138) Net increase/(decrease) in net assets from Fund share transactions.............................................. 428,178 599,041 -------------- -------------- Net increase/(decrease) in net assets....................... 396,939 698,978 NET ASSETS: Beginning of period......................................... 851,962 152,984 -------------- -------------- End of period............................................... $ 1,248,901 $ 851,962 ============== ============== Undistributed net investment income/(loss)/(distributions in excess of net investment income) at end of period......... $ 212 $ -- ============== ==============
- --------------- # Amount represents results from operations prior to conversion to master-feeder structure. + Allocated from International Value Master Portfolio and International Equity Master Portfolio, respectively. (a) As of October 18, 1999 and October 8, 1999, respectively, International Value and International Equity converted to a master-feeder structure. (b) International Opportunities commenced operations on August 1, 2000. SEE NOTES TO FINANCIAL STATEMENTS. 12 17 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
INTERNATIONAL EQUITY INTERNATIONAL EMERGING MARKETS ----------------------------------------- OPPORTUNITIES ----------------------------------------- SIX MONTHS -------------- SIX MONTHS ENDED PERIOD ENDED ENDED 9/30/00 YEAR ENDED 9/30/00(b) 9/30/00 YEAR ENDED (UNAUDITED) 3/31/00(a) (UNAUDITED) (UNAUDITED) 3/31/00 - ------------------------------------------------------------------------------------------------------------------------------ $ 7,231 $ 5,228 $ 1 $ (190) $ (153) -- 99,696# (19) 2,879 3,874 17,279 90,176 -- -- -- -- (20,613)# (51) (21,134) 18,776 (154,167) 104,091 -- -- -- -------------- -------------- -------------- -------------- -------------- (129,657) 278,578 (69) (18,445) 22,497 (5,853) (3,424) -- -- (11) -- -- -- -- -- (210) (85) -- -- -- (137) (52) -- -- -- (5) (5) -- -- -- (55,355) (112,315) -- -- -- -- -- -- -- -- (1,704) (4,362) -- -- -- (2,107) (4,558) -- -- -- (68) (143) -- -- -- 294,497 3,532 6,448 4,458 16,119 -------------- -------------- -------------- -------------- -------------- 99,401 157,166 6,379 (13,987) 38,605 942,902 785,736 -- 62,909 24,304 -------------- -------------- -------------- -------------- -------------- $ 1,042,303 $ 942,902 $ 6,378 $ 48,922 $ 62,909 ============== ============== ============== ============== ============== $ (3,187) $ (4,213) $ 1 $ (430) $ (240) ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 13 18 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY
INTERNATIONAL VALUE SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 -------------------- -------------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 18,675 $ 351,870 25,792 $ 444,906 Issued as reinvestment of dividends....................... 1,207 21,426 541 9,269 Redeemed.................................................. (4,459) (83,871) (4,223) (71,784) ------- --------- ------- --------- Net increase/(decrease)................................... 15,423 $ 289,425 22,110 $ 382,391 ======= ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 23,847 $ 448,820 29,999 $ 523,613 Issued as reinvestment of dividends....................... 593 10,489 196 3,460 Redeemed.................................................. (18,729) (352,371) (20,662) (365,045) ------- --------- ------- --------- Net increase/(decrease)................................... 5,711 $ 106,938 9,533 $ 162,028 ======= ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 1,121 $ 20,968 2,544 $ 44,056 Issued as reinvestment of dividends....................... 161 2,803 40 704 Redeemed.................................................. (136) (2,533) (147) (2,533) ------- --------- ------- --------- Net increase/(decrease)................................... 1,146 $ 21,238 2,437 $ 42,227 ======= ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 584 $ 10,893 745 $ 12,799 Issued as reinvestment of dividends....................... 41 727 11 182 Redeemed.................................................. (55) (1,043) (33) (586) ------- --------- ------- --------- Net increase/(decrease)................................... 570 $ 10,577 723 $ 12,395 ======= ========= ======= ========= Total net increase/(decrease)............................. 22,850 $ 428,178 34,803 $ 599,041 ======= ========= ======= =========
SEE NOTES TO FINANCIAL STATEMENTS. 14 19 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
INTERNATIONAL EQUITY SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 -------------------- -------------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 54,096 $ 770,139 15,671 $ 202,540 Issued in exchange for: Assets of Boatmen's Trust Company International Equity Fund (Note 9)......................................... 2,048 29,129 -- -- Primary A Shares of Nations International Growth Fund (Note 9).............................................. 1,260 17,669 -- -- Issued as reinvestment of dividends....................... 2,184 30,640 1,405 56,983 Redeemed.................................................. (41,144) (595,258) (17,980) (272,131) ------- --------- ------- --------- Net increase/(decrease)................................... 18,444 $ 252,319 (904) $ (12,608) ======= ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 51,498 $ 741,252 53,789 $ 802,774 Issued in exchange for: Investor A Shares of Nations International Growth Fund (Note 9).............................................. 1,309 18,066 -- -- A Shares of Pacific Horizon International Equity Fund (Note 9).............................................. -- -- 3,095 41,876 Issued as reinvestment of dividends....................... 99 1,361 44 2,789 Redeemed.................................................. (50,197) (723,228) (55,232) (830,083) ------- --------- ------- --------- Net increase/(decrease)................................... 2,709 $ 37,451 1,696 $ 17,356 ======= ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 117 $ 2,883 311 $ 1,322 Issued in exchange for: Investor B Shares of Nations International Growth Fund (Note 9).............................................. 144 1,921 -- -- B Shares of Pacific Horizon International Equity Fund (Note 9).............................................. -- -- 29 389 Issued as reinvestment of dividends....................... 157 2,110 112 4,442 Redeemed.................................................. (216) (3,004) (511) (7,354) ------- --------- ------- --------- Net increase/(decrease)................................... 202 $ 3,910 (59) $ (1,201) ======= ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 64 $ 1,166 53 $ 616 Issued in exchange for: Investor C Shares of Nations International Growth Fund (Note 9).............................................. 30 392 -- -- K Shares of Pacific Horizon International Equity Fund (Note 9).............................................. -- -- 62 808 Issued as reinvestment of dividends....................... 6 72 3 193 Redeemed.................................................. (60) (813) (116) (1,632) ------- --------- ------- --------- Net increase/(decrease)................................... 40 $ 817 2 $ (15) ======= ========= ======= ========= Total net increase/(decrease)............................. 21,395 $ 294,497 735 $ 3,532 ======= ========= ======= =========
SEE NOTES TO FINANCIAL STATEMENTS. 15 20 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
INTERNATIONAL OPPORTUNITIES PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) ------------------- SHARES DOLLARS ------------------- (IN THOUSANDS) PRIMARY A SHARES:+ Sold...................................................... 151 $1,515 Issued as reinvestment of dividends....................... -- -- Redeemed.................................................. -- -- --- ------ Net increase/(decrease)................................... 151 $1,515 === ====== INVESTOR A SHARES:+ Sold...................................................... 195 $1,982 Issued as reinvestment of dividends....................... -- -- Redeemed.................................................. (1) (11) --- ------ Net increase/(decrease)................................... 194 $1,971 === ====== INVESTOR B SHARES:+ Sold...................................................... 199 $2,026 Issued as reinvestment of dividends....................... -- -- Redeemed.................................................. --* --* --- ------ Net increase/(decrease)................................... 199 $2,026 === ====== INVESTOR C SHARES:+ Sold...................................................... 99 $1,001 Issued as reinvestment of dividends....................... -- -- Redeemed.................................................. (6) (65) --- ------ Net increase/(decrease)................................... 93 $ 936 === ====== Total net increase/(decrease)............................. 637 $6,448 === ======
- --------------- * Amount represents less than 500 shares and/or $500, as applicable. + International Opportunities Primary A, Investor A, Investor B and Investor C Shares commenced operations on August 1, 2000. SEE NOTES TO FINANCIAL STATEMENTS. 16 21 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
EMERGING MARKETS SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 -------------------- ------------------ SHARES DOLLARS SHARES DOLLARS -------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 1,217 $ 16,086 1,968 $ 26,549 Issued as reinvestment of dividends....................... -- -- --* --* Redeemed.................................................. (854) (11,226) (1,065) (11,604) ------ -------- ------ -------- Net increase/(decrease)................................... 363 $ 4,860 903 $ 14,945 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 834 $ 10,984 1,238 $ 15,527 Issued as reinvestment of dividends....................... -- -- -- -- Redeemed.................................................. (839) (11,240) (1,158) (14,764) ------ -------- ------ -------- Net increase/(decrease)................................... (5) $ (256) 80 $ 763 ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 13 $ 171 66 $ 878 Issued as reinvestment of dividends....................... -- -- -- -- Redeemed.................................................. (25) (325) (37) (429) ------ -------- ------ -------- Net increase/(decrease)................................... (12) $ (154) 29 $ 449 ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 1 $ 10 6 $ 83 Issued as reinvestment of dividends....................... -- -- -- -- Redeemed.................................................. --* (2) (9) (121) ------ -------- ------ -------- Net increase/(decrease)................................... 1 $ 8 (3) $ (38) ====== ======== ====== ======== Total net increase/(decrease)............................. 347 $ 4,458 1,009 $ 16,119 ====== ======== ====== ========
- --------------- * Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 17 22 NATIONS FUNDS FINANCIAL HIGHLIGHTS For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME ----------------------------------------------------------------------------------------------- INTERNATIONAL VALUE: PRIMARY A SHARES* Six months ended 9/30/2000# (unaudited)................. $18.78 $0.20 $0.39 $0.59 $(0.17) $ -- Year ended 3/31/2000#......... 14.45 0.37 4.73 5.10 (0.28) -- Period ended 3/31/1999#....... 15.53 0.16 0.28 0.44 (0.18) -- Period ended 5/15/1998........ 13.17 0.09 2.56 2.65 -- -- Year ended 11/30/1997......... 11.29 0.09 1.91 2.00 (0.09) (0.01) Period ended 11/30/1996**..... 10.00 0.06 1.29 1.35 (0.06) -- INVESTOR A SHARES* Six months ended 9/30/2000# (unaudited)................. $18.77 $0.17 $0.39 $0.56 $(0.16) $ -- Year ended 3/31/2000#......... 14.43 0.36 4.72 5.08 (0.25) -- Period ended 3/31/1999#....... 15.44 0.14 0.36 0.50 (0.17) -- Period ended 5/15/1998........ 13.13 0.08 2.52 2.60 -- -- Year ended 11/30/1997......... 11.29 0.01 1.91 1.92 (0.01) (0.05) Period ended 11/30/1996**..... 10.00 0.04 1.31 1.35 (0.04) -- INVESTOR B SHARES Six months ended 9/30/2000# (unaudited)................. $18.64 $0.10 $0.40 $0.50 $(0.11) $ -- Year ended 3/31/2000#......... 14.40 0.22 4.66 4.88 (0.15) -- Period ended 3/31/1999***#.... 14.33 0.06 0.76 0.82 (0.13) -- INVESTOR C SHARES Six months ended 9/30/2000# (unaudited)................. $18.65 $0.10 $0.39 $0.49 $(0.11) $ -- Year ended 3/31/2000#......... 14.41 0.21 4.69 4.90 (0.17) -- Period ended 3/31/1999***#.... 13.33 0.06 1.77 1.83 (0.13) --
- --------------- + Annualized ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * The financial information for the fiscal periods through May 22, 1998 reflect the financial information for the Emerald International Equity Fund Institutional and Retail Shares, which were reorganized into the International Value Primary A and Investor A Shares, respectively, as of May 22, 1998. ** International Value Primary A and Investor A Shares commenced operations on December 27, 1995. *** International Value Investor B and Investor C Shares commenced operations on May 22, 1998 and June 15, 1998, respectively. # Per share net investment income has been calculated using the monthly average shares method. ### Amount represents results prior to conversion to a master-feeder structure. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 18 23 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF DISTRIBUTIONS TOTAL NET ASSETS OPERATING INVESTMENT OPERATING FROM NET DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO REALIZED AND VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE GAINS DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS - --------------------------------------------------------------------------------------------------------------------------------- $(0.88) $(1.05) $18.32 3.31% $868,372 1.11%+ 2.09%+ -- 1.22%+ (0.49) (0.77) 18.78 36.03 600,589 1.24(a) 2.11 12%### 1.34(a) (1.34) (1.52) 14.45 1.48 142,546 1.30+ 1.36+ 44 1.39+ (0.29) (0.29) 15.53 20.54 119,412 1.25+ 2.06+ 88 1.26+ (0.02) (0.12) 13.17 17.75 54,277 1.21 0.89 29 1.21 -- (0.06) 11.29 13.47 17,528 0.00+ 0.00+ 50 3.46+ $(0.88) $(1.04) $18.29 3.17% $286,395 1.36%+ 1.84%+ -- 1.47%+ (0.49) (0.74) 18.77 35.86 186,649 1.49(a) 1.86 12%### 1.59(a) (1.34) (1.51) 14.43 1.75 5,960 1.55+ 1.11+ 44 1.64+ (0.29) (0.29) 15.44 20.22 5,128 1.81+ 1.21+ 88 1.82+ (0.02) (0.08) 13.13 17.11 4,259 1.73 0.26 29 1.93 (0.02) (0.06) 11.29 13.54 115 0.00+ 1.83+ 50 57.40+ $(0.88) $(0.99) $18.15 2.87% $ 70,447 2.11%+ 1.09%+ -- 2.22%+ (0.49) (0.64) 18.64 34.51 50,999 2.24(a) 1.11 12%### 2.34(a) (0.62) (0.75) 14.40 1.25 4,296 2.30+ 0.36+ 44 2.39+ $(0.88) $(0.99) $18.15 2.83% $ 23,687 2.11%+ 1.09%+ -- 2.22%+ (0.49) (0.66) 18.65 34.64 13,725 2.24(a) 1.11 12%### 2.34(a) (0.62) (0.75) 14.41 3.98 182 2.30+ 0.36+ 44 2.39+
SEE NOTES TO FINANCIAL STATEMENTS. 19 24 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME ----------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY: PRIMARY A SHARES Six months ended 9/30/2000# (unaudited)................. $16.74 $ 0.11 $(2.26) $(2.15) $(0.10) $ -- Year ended 3/31/2000#......... 14.12 0.10 4.91 5.01 (0.06) -- Year ended 3/31/1999#......... 14.81 0.11 0.39 0.50 (0.12) -- Year ended 3/31/1998#......... 13.13 0.11 1.95 2.06 (0.17) (0.05) Year ended 3/31/1997#......... 13.50 0.08 0.11 0.19 (0.11) (0.00)## Period ended 3/31/1996*#...... 11.75 0.07 1.80 1.87 (0.06) (0.04) Year ended 5/31/1995#......... 12.06 0.14 (0.20) (0.06) (0.03) -- INVESTOR A SHARES Six months ended 9/30/2000# (unaudited)................. $16.51 $ 0.08 $(2.21) $(2.13) $(0.09) $ -- Year ended 3/31/2000#......... 13.97 0.06 4.86 4.92 (0.05) -- Year ended 3/31/1999#......... 14.67 0.08 0.40 0.48 (0.11) -- Year ended 3/31/1998#......... 13.01 0.07 1.94 2.01 (0.15) (0.04) Year ended 3/31/1997#......... 13.39 0.05 0.11 0.16 (0.09) (0.00)## Period ended 3/31/1996*#...... 11.67 0.04 1.78 1.82 (0.04) (0.04) Year ended 5/31/1995#......... 12.00 0.11 (0.20) (0.09) (0.02) -- INVESTOR B SHARES Six months ended 9/30/2000# (unaudited)................. $16.06 $ 0.05 $(2.17) $(2.12) $(0.07) $ -- Year ended 3/31/2000#......... 13.75 (0.05) 4.72 4.67 (0.03) -- Year ended 3/31/1999#......... 14.56 (0.03) 0.38 0.35 (0.09) -- Year ended 3/31/1998#......... 12.83 (0.03) 1.92 1.89 -- -- Year ended 3/31/1997#......... 13.27 (0.05) 0.10 0.05 (0.04) (0.00)## Period ended 3/31/1996*#...... 11.56 (0.02) 1.78 1.76 -- (0.03) Year ended 5/31/1995#......... 11.96 0.05 (0.22) (0.17) (0.01) -- INVESTOR C SHARES Six months ended 9/30/2000# (unaudited)................. $15.72 $ 0.04 $(2.13) $(2.09) $(0.07) $ -- Year ended 3/31/2000#......... 13.52 (0.03) 4.60 4.57 (0.04) -- Year ended 3/31/1999#......... 14.34 (0.03) 0.37 0.34 (0.09) -- Year ended 3/31/1998#......... 12.74 (0.01) 1.89 1.88 (0.10) (0.02) Year ended 3/31/1997#......... 13.13 0.02 0.10 0.12 (0.06) (0.00)## Period ended 3/31/1996*#...... 11.45 (0.03) 1.75 1.72 -- (0.02) Year ended 5/31/1995#......... 11.86 0.02 (0.21) (0.19) -- --
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Fiscal year end changed to March 31. Prior to this, the fiscal year end was May 31. # Per share net investment income/(loss) has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. ### Amount represents results prior to conversion to a master-feeder structure. (a) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 20 25 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
DISTRIBUTIONS RATIO OF RATIO OF NET DISTRIBUTIONS IN EXCESS TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT FROM NET OF NET DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO REALIZED REALIZED AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER GAINS GAINS DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS RATE - ----------------------------------------------------------------------------------------------------------------------------- $(1.07) $ -- $(1.17) $13.42 (13.10)% $942,565 1.14%+(a) 1.55%+ -- (2.33) -- (2.39) 16.74 39.85 866,731 1.14 0.69 129%### (1.07) -- (1.19) 14.12 3.68 743,861 1.13 0.79 146 (0.16) -- (0.38) 14.81 16.06 885,329 1.14 0.76 64 (0.42) (0.03) (0.56) 13.13 1.32 976,855 1.16 0.62 36 (0.02) -- (0.12) 13.50 16.01 849,731 1.17+ 0.65+ 26 (0.12) (0.10) (0.25) 11.75 (0.46) 572,940 1.03 1.17 92 $(1.07) $ -- $(1.16) $13.22 (13.19)% $ 70,309 1.39%+(a) 1.30%+ -- (2.33) -- (2.38) 16.51 39.54 43,111 1.39 0.44 129%### (1.07) -- (1.18) 13.97 3.59 12,785 1.38 0.54 146 (0.16) -- (0.35) 14.67 15.77 13,477 1.39 0.51 64 (0.42) (0.03) (0.54) 13.01 1.08 9,443 1.41 0.37 36 (0.02) -- (0.10) 13.39 15.66 7,643 1.42+ 0.40+ 26 (0.12) (0.10) (0.24) 11.67 (0.69) 4,877 1.28 0.92 92 $(1.07) $ -- $(1.14) $12.80 (13.51)% $ 28,146 2.14%+(a) 0.55%+ -- (2.33) -- (2.36) 16.06 38.14 32,073 2.14 (0.31) 129%### (1.07) -- (1.16) 13.75 2.65 28,266 2.13 (0.21) 146 (0.16) -- (0.16) 14.56 14.93 34,119 2.14 (0.24) 64 (0.42) (0.03) (0.49) 12.83 0.28 36,698 2.16 (0.38) 36 (0.02) -- (0.05) 13.27 15.25 40,426 1.99+ (0.17)+ 26 (0.12) (0.10) (0.23) 11.56 (1.30) 31,372 1.78 0.42 92 $(1.07) $ -- $(1.14) $12.49 (13.62)% $ 1,283 2.14%+(a) 0.55%+ -- (2.33) -- (2.37) 15.72 38.12 987 2.14 (0.31) 129%### (1.07) -- (1.16) 13.52 2.63 824 2.13 (0.21) 146 (0.16) -- (0.28) 14.34 15.05 933 1.97 (0.07) 64 (0.42) (0.03) (0.51) 12.74 0.77 988 1.66 0.12 36 (0.02) -- (0.04) 13.13 15.09 652 2.09+ (0.27)+ 26 (0.12) (0.10) (0.22) 11.45 (1.56) 495 2.03 0.17 92 WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF OPERATING EXPENSES TO AVERAGE NET ASSETS --------------- 1.14%+ 1.18 1.13 1.14 1.16 1.18+ 1.04 1.39%+ 1.43 1.38 1.39 1.41 1.43+ 1.29 2.14%+ 2.18 2.13 2.14 2.16 2.00+ 1.79 2.14%+ 2.18 2.13 1.97 1.66 2.10+ 2.04
SEE NOTES TO FINANCIAL STATEMENTS. 21 26 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED VALUE NET AND UNREALIZED BEGINNING INVESTMENT GAIN/(LOSS) ON OF PERIOD INCOME/(LOSS) INVESTMENTS -------------------------------------------------- INTERNATIONAL OPPORTUNITIES PRIMARY A SHARES Period ended 9/30/2000* (unaudited)......................... $10.00 $ 0.02 $0.01 INVESTOR A SHARES Period ended 9/30/2000* (unaudited)......................... $10.00 $ 0.01 $0.01 INVESTOR B SHARES Period ended 9/30/2000* (unaudited)......................... $10.00 $(0.02) $0.03 INVESTOR C SHARES Period ended 9/30/2000* (unaudited)......................... $10.00 $(0.02) $0.03
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * International Opportunities Primary A, Investor A, Investor B and Investor C Shares commenced operations on August 1, 2000. SEE NOTES TO FINANCIAL STATEMENTS. 22 27 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF NET INCREASE/ NET ASSETS OPERATING INVESTMENT OPERATING (DECREASE) IN NET ASSET END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO NET ASSET VALUE VALUE TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE FROM OPERATIONS END OF PERIOD RETURN++ (000) ASSETS NET ASSETS RATE NET ASSETS - ------------------------------------------------------------------------------------------------------------------- $0.03 $10.03 0.30% $1,519 1.49%+ 0.43%+ 85% 10.64%+ $0.02 $10.02 0.20% $1,945 1.74%+ 0.18%+ 85% 10.89%+ $0.01 $10.01 0.10% $1,988 2.49%+ (0.57)%+ 85% 11.64%+ $0.01 $10.01 0.10% $ 926 2.49%+ (0.57)%+ 85% 11.64%+
SEE NOTES TO FINANCIAL STATEMENTS. 23 28 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME ----------------------------------------------------------------------------------------------- EMERGING MARKETS PRIMARY A SHARES Six months ended 9/30/2000# (unaudited)................. $15.76 $(0.04) $(4.44) $(4.48) $ -- $ -- Year ended 3/31/2000#......... 8.14 (0.05) 7.68 7.63 (0.01) -- Year ended 3/31/1999#......... 10.60 0.14 (2.53) (2.39) (0.07) -- Year ended 3/31/1998#......... 11.41 0.04 (0.76) (0.72) (0.09) -- Year ended 3/31/1997#......... 10.34 0.01 1.21 1.22 (0.02) (0.07) Period ended 3/31/1996*#...... 10.00 (0.03) 0.37 0.34 -- (0.00)## INVESTOR A SHARES Six months ended 9/30/2000# (unaudited)................. $15.65 $(0.05) $(4.41) $(4.46) $ -- $ -- Year ended 3/31/2000#......... 8.09 (0.09) 7.65 7.56 -- -- Year ended 3/31/1999#......... 10.57 0.10 (2.52) (2.42) (0.06) -- Year ended 3/31/1998#......... 11.39 0.01 (0.75) (0.74) (0.08) -- Year ended 3/31/1997#......... 10.32 (0.01) 1.21 1.20 (0.02) (0.05) Period ended 3/31/1996*#...... 10.00 (0.05) 0.37 0.32 -- -- INVESTOR B SHARES Six months ended 9/30/2000# (unaudited)................. $15.32 $(0.10) $(4.31) $(4.41) $ -- $ -- Year ended 3/31/2000#......... 7.99 (0.16) 7.49 7.33 -- -- Year ended 3/31/1999#......... 10.49 0.05 (2.50) (2.45) (0.05) -- Year ended 3/31/1998#......... 11.31 (0.07) (0.75) (0.82) -- -- Year ended 3/31/1997#......... 10.26 (0.09) 1.20 1.11 -- -- Period ended 3/31/1996*#...... 10.00 (0.11) 0.37 0.26 -- -- INVESTOR C SHARES Six months ended 9/30/2000# (unaudited)................. $15.31 $(0.10) $(4.31) $(4.41) $ -- $ -- Year ended 3/31/2000#......... 7.98 (0.14) 7.47 7.33 -- -- Year ended 3/31/1999#......... 10.47 0.05 (2.49) (2.44) (0.05) -- Year ended 3/31/1998#......... 11.34 (0.05) (0.75) (0.80) (0.07) -- Year ended 3/31/1997#......... 10.27 (0.04) 1.20 1.16 (0.01) (0.02) Period ended 3/31/1996*#...... 10.00 (0.10) 0.37 0.27 -- --
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Emerging Markets Primary A, Investor A, Investor B and Investor C Shares commenced operations on June 30, 1995. # Per share net investment income/(loss) has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 24 29 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
RATIO OF NET OPERATING EXPENSES RATIO OF INCLUDING RATIO OF NET DISTRIBUTIONS TOTAL NET ASSET NET ASSETS OPERATING INTEREST INVESTMENT FROM NET DIVIDENDS VALUE END OF EXPENSES TO EXPENSE INCOME/(LOSS) PORTFOLIO REALIZED AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TO AVERAGE TURNOVER GAINS DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS NET ASSETS NET ASSETS RATE - -------------------------------------------------------------------------------------------------------------------------- $ -- $ -- $11.28 (28.43)% $44,333 1.82%+ 1.83%+ (0.62)%+ 34% -- (0.01) 15.76 93.71 56,234 1.90 1.91 (0.40) 61 -- (0.07) 8.14 (22.60) 21,689 1.78(a) (b) 1.66 71 -- (0.09) 10.60 (6.39) 73,797 1.57 -- 0.36 63 (0.06) (0.15) 11.41 11.97 76,483 1.74 -- 0.13 31 -- (0.00)## 10.34 3.42 47,560 2.13+ -- (0.38)+ 17 $ -- $ -- $11.19 (28.45)% $ 2,153 2.07%+ 2.08%+ (0.87)%+ 34% -- -- 15.65 93.33 3,087 2.15 2.16 (0.65) 61 -- (0.06) 8.09 (22.90) 951 2.03(a) (b) 1.41 71 -- (0.08) 10.57 (6.60) 652 1.82 -- 0.11 63 (0.06) (0.13) 11.39 11.74 894 1.99 -- (0.12) 31 -- -- 10.32 3.20 477 2.38+ -- (0.63)+ 17 $ -- $ -- $10.91 (28.79)% $ 2,344 2.82%+ 2.83%+ (1.62)%+ 34% -- -- 15.32 91.74 3,468 2.90 2.91 (1.40) 61 -- (0.05) 7.99 (23.42) 1,579 2.78(a) (b) 0.66 71 -- -- 10.49 (7.25) 1,247 2.57 -- (0.64) 63 (0.06) (0.06) 11.31 10.88 1,499 2.74 -- (0.87) 31 -- -- 10.26 2.60 1,209 3.13+ -- (1.38)+ 17 $ -- $ -- $10.90 (28.76)% $ 92 2.82%+ 2.83%+ (1.62)%+ 34% -- -- 15.31 91.73 120 2.90 2.91 (1.40) 61 -- (0.05) 7.98 (23.37) 86 2.78(a) (b) 0.66 71 -- (0.07) 10.47 (7.17) 293 2.40 -- (0.47) 63 (0.06) (0.09) 11.34 11.34 226 2.24 -- (0.37) 31 -- -- 10.27 2.70 23 3.02+ -- (1.27)+ 17 WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF OPERATING EXPENSES TO AVERAGE NET ASSETS --------------- 1.84%+ 2.54 1.98(a) 1.57 1.74 2.13+ 2.09%+ 2.79 2.23(a) 1.82 1.99 2.38+ 2.84%+ 3.54 2.98(a) 2.57 2.74 3.13+ 2.84%+ 3.54 2.98(a) 2.40 2.24 3.02+
SEE NOTES TO FINANCIAL STATEMENTS. 25 30 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Nations Reserves ("Reserves") and Nations Funds Trust ("Funds Trust") are each registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. At September 30, 2000, Reserves offered sixteen separate portfolios and Funds Trust offered five separate portfolios. These financial statements pertain only to the international stock portfolios of Reserves and Funds Trust: International Value Fund, International Equity Fund, International Opportunities Fund and Emerging Markets Fund (each a "Fund" and collectively, the "Funds"). Financial statements for the other portfolios of Reserves and Funds Trust are presented under separate cover. The Funds currently offer four classes of shares: Primary A Shares, Investor A Shares, Investor B Shares and Investor C Shares. Shareholders of a Fund have equal voting rights on matters affecting all shareholders of the Fund. In addition, each class of shares of a Fund has exclusive voting rights on matters that relate solely to that class and separate voting rights on matters in which the interests of one class differ from the interests of any other class. International Value Fund and International Equity Fund (the "Feeder Funds") seek to achieve their investment objectives by investing substantially all of their assets in International Value Master Portfolio and International Equity Master Portfolio, respectively (the "Master Portfolios"), each a series of Nations Master Investment Trust (the "Master Trust"), another open-end management investment company in the Nations Funds family. The Master Portfolios each have the same investment objective as that of its corresponding Feeder Fund. The value of the Feeder Funds' investments in the respective Master Portfolios included in the Statements of net assets reflects the Feeder Funds' proportionate beneficial interest in the net assets of the respective Master Portfolios (98.1% at September 30, 2000 for International Value Master Portfolio and 99.1% for International Equity Master Portfolio). The financial statements of the Master Portfolios, including their schedules of investments, are included elsewhere within this report and should be read in conjunction with the Feeder Funds' financial statements. Other funds not registered under the 1940 act offered by the Nations Offshore Funds and managed by Banc of America Advisors, Inc. ("BAAI"), whose financial statements are not presented here, also invest in the Master Portfolios. On August 1, 2000, the International Opportunities Fund commenced operations in a master-feeder structure. The Fund seeks to achieve its investment objective by investing substantially all of its assets in the International Opportunities Master Portfolio of the Master Trust, which has the same investment objective as the Fund. Because the value of the Fund's investment in the International Opportunities Master Portfolio at September 30, 2000 represented substantially all of the beneficial interest in the International Opportunities Master Portfolio, financial statements of the International Opportunities Master Portfolio have not been prepared and references in this report to International Opportunities Fund should be read to include references to the corresponding Master Portfolio. 1. SIGNIFICANT ACCOUNTING POLICIES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. Securities valuation: Securities traded on a recognized exchange or on NASDAQ are valued at the last sale price on the exchange or market on which such securities are primarily traded. Securities traded only over-the-counter are valued at the last sale price, or if no sale occurred on such day, at the mean of the current bid and asked prices. Debt securities are generally valued by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate, maturity and general market conditions. Restricted securities, securities for which market quotations are not readily available, and certain other assets may be valued under procedures adopted by the Board of Trustees. Short-term investments that mature in 60 days or less are valued at amortized cost, which approximates current market value. The valuation of each Feeder Fund's investment in its corresponding Master Portfolio is based on the reported net asset value of that Master Portfolio. The Master Portfolios use valuation policies consistent with those described above. Foreign currency translation: The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of 26 31 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) such transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date of securities transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of a Fund and the amounts actually received. The effects of changes in foreign currency exchange rates on securities are not separately stated in the Statements of operations from the effects of changes in market prices of those securities, but are included with the net realized and unrealized gain or loss on securities. Forward foreign currency transactions: Generally, each Fund may enter into forward currency exchange contracts only under two circumstances: (i) when a Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, to "lock" in the U.S. exchange rate of the transaction, with such period being a short-dated contract covering the period between transaction date and settlement date; and (ii) when the investment adviser or sub-adviser believes that the currency of a particular foreign country may experience a substantial movement against the U.S. dollar. Forward foreign currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by a Fund as an unrealized gain or loss. When the contract is closed or offset with the same counterparty, a Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed or offset. Forward foreign currency contracts will be used primarily to protect the Funds from adverse currency movements and will generally not be entered into for terms greater than one year. The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of a Fund's investment securities; however, it does establish a rate of exchange that can be achieved in the future. The use of forward contracts involves the risk that anticipated currency movements will not be accurately predicted. A forward contract would limit the risk of loss due to a decline in the value of a particular currency; however, it also would limit any potential gain that might result should the value of the currency increase instead of decrease. These contracts may involve market risk in excess of the unrealized gain or loss reflected in the Statements of net assets. In addition, the Funds could be exposed to risks if counterparties to the contracts are unable to meet the terms of their contracts. The counterparty risk exposure is, therefore, closely monitored and contracts are only executed with high credit quality financial institutions. Securities transactions and investment income: Securities transactions are accounted for on trade date. Realized gains and losses are computed based on the specific identification of securities sold. Interest income, adjusted for accretion of discounts and amortization of premiums, is earned from settlement date and recorded on an accrual basis. Dividend income is recorded on ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Funds are informed of the ex-dividend date. Each Fund's investment income and realized and unrealized gains and losses are allocated among its share classes based upon the relative net assets of each class of shares. The Feeder Funds record their share of the investment income and realized and unrealized gains and losses reported by the Master Portfolios on a daily basis. The investment income and realized and unrealized gains and losses are allocated daily to investors in the Master Portfolios based upon the value of their investments in the Master Portfolios. Dividends and distributions to shareholders: Distributions from net investment income are declared and paid each calendar quarter for all Funds except International Value, which declares and pays distributions annually. Each Fund will distribute net realized capital gains (including net short-term capital gains) at least annually after the fiscal year in which the capital gains were earned, unless offset by any available capital loss carryforward. Income distributions and capital gain distributions on a Fund level are determined in accordance with federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. Federal income tax: Each Fund intends to continue to qualify as a regulated investment company by complying with the applicable requirements of the Internal Revenue Code of 1986, as amended, and by distributing substantially all of its earnings to its shareholders. Therefore, no provision is made for federal income or excise taxes. The Funds may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Funds will accrue such taxes and recoveries as applicable, based upon their current interpretation of tax rules and regulations that exist in the markets in which they invest. 27 32 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) Expenses: General expenses of Reserves and Funds Trust are allocated to the Funds based upon their relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Fund or class of shares are charged to such Fund or class. The Funds bear all costs in connection with their organization, including the fees and expenses of registering and qualifying their shares for distribution under federal and state securities regulations. All such costs are being amortized on a straight line basis over a period of five years from commencement of operations. The Feeder Funds record their share of the expenses reported by the Master Portfolios on a daily basis. The expenses are allocated daily to investors in the Master Portfolios based upon the value of the Feeder Funds' investments in the Master Portfolios. 2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS Each of Reserves and Funds Trust has entered into an investment advisory agreement (the "Investment Advisory Agreements") with BAAI, a wholly-owned subsidiary of Bank of America, N.A. ("Bank of America"), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, pursuant to which BAAI provides investment advisory services to the Funds. Under the terms of the Investment Advisory Agreements, BAAI is entitled to receive an advisory fee, calculated daily and payable monthly, based on the following annual rates multiplied by the average daily net assets of each Fund:
ANNUAL RATE ------ International Opportunities................... 0.80% Emerging Markets.............................. 1.00
The Feeder Funds indirectly pay for investment advisory services through their investments in their corresponding Master Portfolios (See Note 2 of Notes to financial statements of the Master Portfolios). Funds Trust has, on behalf of the International Opportunities Fund, entered into a sub-advisory agreement with BAAI and Marsico Capital Management, LLC ("Marsico"), pursuant to which Marsico is entitled to receive a sub-advisory fee from BAAI at the maximum annual rate of 0.45% of the Fund's average daily net assets. Marsico Management Holdings, LLC, a partially-owned subsidiary of Bank of America, owns 50% of the equity of Marsico. On June 28, 2000, Bank of America announced its intention to purchase the remaining 50% equity interest in Marsico. The proposed purchase is not expected to result in any change in the Marsico personnel who manage the Fund or in the way that the Fund is managed. Reserves has, on behalf of the Emerging Markets Fund, entered into a sub-advisory agreement (the "Sub-Advisory Agreements") with BAAI and Gartmore Global Partners ("Gartmore"). Gartmore is a general partnership which is an indirect wholly-owned subsidiary of Nationwide Mutual Insurance Company. Under the Sub-Advisory Agreements, Gartmore is entitled to receive a sub-advisory fee from BAAI at the maximum annual rate of 0.66 % of the Fund's average daily net assets. Prior to May 15, 2000, Gartmore received a sub-advisory fee from BAAI at the maximum annual rate of 0.85% of the Fund's average daily net assets. The Feeder Funds indirectly pay for sub-advisory services through their investments in their corresponding Master Portfolios (See Note 2 of Notes to financial statements of the Master Portfolios). Stephens Inc. ("Stephens") and BAAI serve as co-administrators of Reserves and Funds Trust. Under the co-administration agreements, Stephens and BAAI are currently entitled to receive a combined fee, computed daily and paid monthly, at the maximum annual rate of 0.22% of the average daily net assets of International Opportunities Fund and Emerging Markets Fund. International Value Fund and International Equity Fund pay a monthly fee at the maximum annual rate of 0.17% of their average daily net assets. The Bank of New York ("BNY") serves as sub-administrator of Reserves and Funds Trust pursuant to agreements with BAAI. For the six months ended September 30, 2000, Stephens and BAAI earned 0.03% and 0.06%, respectively, of the Funds' average daily net assets for their co-administration services. BAAI and/or the sub-advisers and Stephens may, from time to time, reduce their fees payable by each Fund. Effective August 1, 2000, BAAI and/or the sub-advisers and Stephens agreed to reimburse expenses and/or waive their fees until July 31, 2001 to the extent that total expenses (excluding shareholder servicing and distribution fees), exceed an annual rate of 1.90% of Emerging Markets Fund's average daily net assets. Prior to that date, BAAI and/or the sub-advisers and Stephens had voluntarily agreed to reimburse expenses and/or waive their fees to maintain this total expense limit. BNY serves as the custodian of the Reserves' and Funds Trust's assets. For the six months ended September 30, 2000, expenses of the Funds were reduced by $355 under 28 33 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) expense offset arrangements with BNY. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangements in an income producing asset if they had not entered into such arrangements. No officer, director or employee of Bank of America or BAAI, or any affiliate thereof, receives any compensation from Reserves and Funds Trust for serving as Trustee or Officer of Reserves and Funds Trust. PFPC Inc. ("PFPC") serves as the transfer agent for the Funds' shares. Bank of America serves as the sub-transfer agent for the Primary A and Primary B Shares of the Funds. For the six months ended September 30, 2000, Bank of America earned approximately $6,509 for providing such services. Stephens also serves as distributor of the Funds' shares. For the six months ended September 30, 2000, the Funds were informed that the distributor received $34,444 in front-end sales charges for sales of Investor A Shares and $113,101 in contingent deferred sales charges from redemption of shares which were subject to such charges. A substantial portion of these fees is paid to affiliates of Bank of America. Reserves' and Funds Trust's eligible Trustees may participate in non-qualified deferred compensation and retirement plans which may be terminated at any time. All benefits provided under these plans are unfunded and any payments to plan participants are paid solely out of the Funds' assets. Income earned on each plan participant's deferral account is tied to the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, to the rate of return of Nations Treasury Fund, a portfolio of Nations Fund, Inc., another registered investment company in the Nations Funds family. The expense for the deferred compensation and retirement plans is included in "Trustees' fees and expenses" in the Statements of operations. A significant portion of each Fund's Primary A Shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion. 3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS Reserves and Funds Trust each has adopted shareholder servicing plans and distribution plans for the Investor A, Investor B and Investor C Shares of each Fund. The shareholder servicing plans permit the Funds to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Funds to compensate or reimburse the distributor (and for Investor A Shares, the distributor and/or selling agents) for activities or expenses primarily intended to result in the sale of the classes' shares. Payments are made at an annual rate, as a percentage of average daily net assets, set from time to time by the Board of Trustees, and are charged as expenses of each Fund directly to the applicable class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BAAI. At September 30, 2000, the rates in effect and plan limits, as a percentage of average daily net assets, were as follows:
CURRENT PLAN RATE LIMIT ---------------- Investor A Combined Shareholder Servicing and Distribution Plan.... 0.25% 0.25% Investor B and Investor C Shareholder Servicing Plans.................... 0.25% 0.25% Investor B and Investor C Distribution Plans................. 0.75% 0.75%
4. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, excluding long-term U.S. government securities and short-term investments, for the six months ended September 30, 2000 were as follows:
PURCHASES SALES (000) (000) -------------------- International Opportunities...... $ 8,190 $ 2,730 Emerging Markets................. 22,955 18,882
There were no purchases or sales of long-term U.S. government securities for the six months ended September 30, 2000. 5. SHARES OF BENEFICIAL INTEREST As of September 30, 2000, an unlimited number of shares of beneficial interest without par value were authorized for Reserves and Funds Trust. Reserves' and Fund Trust's Declarations of Trust authorize the Boards of Trustees to classify or reclassify any authorized, but unissued shares into one or more additional classes or series of shares. See Schedules of capital stock activity. 6. LINES OF CREDIT Reserves and Funds Trust each participate with other Nations Funds in an uncommitted line of credit provided 29 34 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) by BNY under a line of credit agreement (the "Agreement"). Advances under the Agreement are taken primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest on borrowings is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. Each participating Fund maintains a ratio of no less than 4 to 1 net assets (not including amounts borrowed pursuant to the Agreement) to the aggregate amount of indebtedness pursuant to the Agreement. For the six months ended September 30, 2000, borrowings by the Funds under the Agreement were as follows:
AVERAGE AMOUNT AVERAGE OUTSTANDING INTEREST FUND (000) RATE - --------------------------------------------------------- Emerging Markets................ $92 7.02%
The average amount outstanding was calculated based on daily balances in the period. Reserves and Funds Trust also participate with other Nations Funds in a committed line of credit provided by BNY. Interest on borrowings under the committed line is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. A facility fee of 0.09% per annum of the total amounts available under the line of credit is charged, of which each Fund pays its pro rata share. This fee is paid quarterly in arrears. Each participating Fund is required to maintain an asset coverage ratio of at least 300% under the terms of the arrangement. For the six months ended September 30, 2000, there were no borrowings by the Funds under the committed line of credit. 7. SECURITIES LENDING Under an agreement with BNY, the Funds can lend their securities to approved brokers, dealers and other financial institutions. Loans are collateralized by cash, in an amount at least equal to the market value of the securities loaned. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of counterparty default, the Fund has the right to use the collateral to offset losses incurred. There would be a potential loss to the Fund in the event the Fund is delayed or prevented from exercising its right to dispose of the collateral. The Fund bears the risk of loss with respect to the investment of collateral. At September 30, 2000, the following Funds had securities on loan:
MARKET VALUE OF MARKET VALUE LOANED SECURITIES OF COLLATERAL FUND (000) (000) - ------------------------------------------------------------ Emerging Markets......... $4,219 $4,581
8. CAPITAL LOSS CARRYFORWARD At March 31, 2000, the Emerging Markets Fund had available for federal income tax purposes unused capital losses of $17,259,091, with $2,189,907 expiring in 2006 and $15,069,184 expiring in 2007. At March 31, 2000, Emerging Markets Fund utilized capital losses of $1,635,307 during the year. Under current tax law, capital and currency losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended March 31, 2000, Emerging Markets Fund elected to defer losses of $63,337 occurring between November 1, 1999 and March 31, 2000 under these rules. 9. REORGANIZATIONS ACQUISITION OF PACIFIC HORIZON FUNDS On May 14, 1999, the International Equity Fund (the "Acquiring Fund"), acquired the assets and liabilities of the Pacific Horizon International Equity Fund (the "Acquired Fund"), in a tax-free reorganization in exchange for shares of the Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired Fund's shareholders. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. Net assets and unrealized appreciation as of the reorganization date were as follows:
TOTAL NET ACQUIRED TOTAL NET TOTAL NET ASSETS OF FUND ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION (000) (000) (000) (000) - ----------------------------------------------------------------- $43,073 $766,603 $809,676 $5,349
CHANGE OF REGISTERED INVESTMENT COMPANY On August 20, 1999, the International Value, International Equity and Emerging Markets Funds, newly established shell portfolios of Reserves (the "Successor Funds"), acquired the assets and liabilities of their predecessor funds, which were series of Nations Fund, 30 35 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) Inc., Nations Fund, Inc. and Nations Fund Portfolios, Inc., respectively, pursuant to a plan of reorganization approved by each predecessor fund's shareholders. The predecessor funds had the same name, investment objective and principal investment strategies as the Successor Funds. The acquisition was accomplished by a tax-free exchange of shares of the Successor Funds in an amount equal to the value of the outstanding shares of the predecessor funds. The financial statements of the Successor Funds reflect the historical financial results of the predecessor funds prior to the reorganizations. CONVERSION OF COMMON TRUST FUNDS On May 12, 2000, the International Equity Fund (the "Acquiring Fund"), acquired the assets of Boatmen's Trust Company International Equity Fund, a common trust fund, managed by Bank of America, N.A., (the "Acquired Fund"), in a tax-free exchange for shares of the Acquiring Fund. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. Net assets and unrealized appreciation as of the conversion date were as follows:
TOTAL NET ACQUIRED TOTAL NET TOTAL NET ASSETS OF FUND ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED ACQUIRED FUND ACQUIRING FUND AFTER CONVERSION APPRECIATION (000) (000) (000) (000) - ----------------------------------------------------------------- $29,129 $868,368 $897,497 $5,808
On September 8, 2000, the International Equity Fund (the "Acquiring Fund"), acquired the assets and liabilities of Nations International Growth Fund (the "Acquired Fund"), in a tax-free reorganization in exchange for shares of the Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired Fund's shareholders. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. Net assets and unrealized appreciation as of the reorganization date were as follows:
TOTAL NET ACQUIRED TOTAL NET TOTAL NET ASSETS OF FUND ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION (000) (000) (000) (000) - ----------------------------------------------------------------- $38,048 $1,023,329 $1,061,377 $8,549
31 36 NATIONS MASTER INVESTMENT TRUST Nations International Value Master Portfolio and Nations International Equity Master Portfolio Semi-Annual Report SEPTEMBER 30, 2000 (UNAUDITED) The following pages should be read in conjunction with the Nations International Value and Nations International Equity Funds' Semi-Annual Report. 32 37 NATIONS MASTER INVESTMENT TRUST Nations International Value Master Portfolio STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 94.9% ARGENTINA -- 0.8% 494,000 Telecom Argentina Stet............. $ 10,683 ---------- BRAZIL -- 6.4% 937,000 Banco Bradesco SA, ADR............. 7,821 241,760 Brasil Telecom Part, ADR........... 14,083 2,434,450 Centrais Eletricas Brasileiras SA, ADR (Electrobas)(!).............. 23,751 882,000 Companhia de Bebidas das Americas (Ambev).......................... 19,514 573,600 Petrol Brasileiros, ADR............ 16,415 ---------- 81,584 ---------- CANADA -- 4.2% 1,800,000 Sun Life Financial Services of Canada(!)........................ 37,124 609,000 Telus Corporation.................. 15,826 ---------- 52,950 ---------- CHINA -- 1.0% 614,000 PetroChina Company Limited......... 12,127 ---------- DENMARK -- 1.6% 158,915 Den Danske Bank(!)................. 20,188 ---------- FRANCE -- 5.9% 479,200 Alcatel SA, ADR.................... 30,130 629,800 Compagnie Generale des Establessements Michelin......... 17,507 23,700 Eridania Beghin - Say SA........... 2,039 341,170 Total Fina Elf..................... 25,055 ---------- 74,731 ---------- GERMANY -- 8.0% 428,000 BASF AG............................ 15,595 858,000 Bayersche Motoren Werke AG......... 29,529 151,710 Deutsche Telekom AG (REGD)......... 5,295 568,300 Deutsche Telekom AG-Sponsored ADR(!)........................... 19,464 347,400 E.On AG(!)......................... 17,934 46,000 Munchener Ruckvers................. 13,599 ---------- 101,416 ---------- HONG KONG -- 3.3% 4,847,500 CLP Holdings Limited............... 21,760 3,159,000 Swire Pacific, Ltd. 'A', ADR....... 19,691 ---------- 41,451 ---------- IRELAND -- 3.1% 931,140 Allied Irish Banks plc............. 20,369 609,000 Bank of Ireland.................... 19,222 ---------- 39,591 ---------- ITALY -- 2.6% 484,840 ENI SpA............................ 25,666 75,390 Telecom Italia SpA................. 7,916 ---------- 33,582 ---------- JAPAN -- 9.9% 188,000 Daiichi Pharmaceutical Company, Ltd. ............................ 4,776 123,100 Hitachi Ltd., ADR.................. 14,064 1,230,000 Komatsu............................ 7,478 540,000 Komatsu Ltd........................ 13,133
VALUE SHARES (000) - ------------------------------------------------------------ JAPAN -- (CONTINUED) 43,400 Matsushita Electric Industrial Company Ltd., ADR................ $ 11,398 10,262,000 Mitsubishi Heavy Industries, Ltd. ............................ 40,645 690,700 Tokio Marine & Fire Insurance Company, Ltd., ADR............... 34,665 ---------- 126,159 ---------- MEXICO -- 2.5% 605,850 Telefonos de Mexico, ADR........... 32,223 ---------- NETHERLANDS -- 3.1% 187,000 Akzo Nobel NV, ADR(!).............. 7,877 484,942 ING Groep NV, ADR.................. 31,945 ---------- 39,822 ---------- NEW ZEALAND -- 1.5% 935,000 Telecom Corporation of New Zealand Ltd., ADR........................ 18,700 ---------- PORTUGAL -- 1.9% 2,359,800 Portugal Telecommunications, ADR... 23,893 ---------- SINGAPORE -- 2.5% 263,453 DBS Group Holdings, ADR............ 11,626 3,464,100 Jardine Matheson Holdings, Ltd., ADR.............................. 20,265 ---------- 31,891 ---------- SOUTH AFRICA -- 1.9% 781,941 De Beers Consolidated Mines, Ltd., ADR.............................. 21,650 379,600 South African Breweries plc........ 2,582 ---------- 24,232 ---------- SOUTH KOREA -- 1.9% 833,000 Korea Electric Power Corporation, ADR.............................. 10,881 714,300 Pohang Iron & Steel Company Ltd., ADR.............................. 13,304 ---------- 24,185 ---------- SPAIN -- 2.5% 444,333 Banco Bilboa Vizcaya Argentaria SA............................... 6,665 416,305 Telefonica SA, ADR................. 24,744 ---------- 31,409 ---------- SWITZERLAND -- 4.4% 1,272,000 Allied Zurich plc, ADR............. 28,793 206,200 Nestle SA.......................... 21,474 22,600 Swisscom AG........................ 5,538 ---------- 55,805 ---------- UNITED KINGDOM -- 25.2% 365,000 Allied Domecq plc.................. 1,819 826,500 BAE Systems plc(!)................. 17,878 137,000 BOC Group plc...................... 1,813 1,775,700 British American Tobacco plc, ADR.............................. 23,195 1,540,000 British Energy plc, ADR............ 16,074 220,100 British Telecom plc, Sponsored ADR.............................. 23,564 632,500 Cadbury Schweppes plc.............. 15,220 379,500 Corus Group plc, ADR............... 2,941 1,136,851 Diageo plc, ADR.................... 40,145 266,500 HSBC Holdings plc.................. 19,028 594,900 Imperial Chemical Industries plc, ADR.............................. 13,794
SEE NOTES TO FINANCIAL STATEMENTS. 33 38 NATIONS MASTER INVESTMENT TRUST Nations International Value Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ UNITED KINGDOM -- (CONTINUED) 1,421,060 Invensys plc....................... $ 6,251 823,465 Marks & Spencer plc, ADR........... 14,829 336,200 National Power plc................. 23,198 321,500 PowerGen plc....................... 10,127 2,037,100 Reckitt & Colman................... 24,892 312,000 Rolls - Royce plc.................. 3,938 1,339,700 Royal & Sun Alliance Insurance Group plc........................ 8,952 4,371,416 Safeway plc........................ 18,548 1,352,600 Unilever plc....................... 35,506 ---------- 321,712 ---------- VENEZUELA -- 0.7% 377,900 Cia Anonima Nacional Telefonos de Venezuela, ADR (CANTV)........... 9,235 ---------- TOTAL COMMON STOCKS (Cost $1,142,804)................ 1,207,569 ---------- PREFERRED STOCKS -- 1.4% (Cost $20,817) BRAZIL -- 1.4% 221,700 Telebras, ADR Pfd. Block........... 17,542 ---------- RIGHTS -- 0.0%+ (Cost $0) BRAZIL -- 0.0%+ 7,132 Telesp Celular Participacoes SA, ADR Expire 10/12/00(!)............... 0++ ----------
SHARES VALUE (000) (000) - ------------------------------------------------------------ INVESTMENT COMPANIES -- 32.8% (Cost $418,065) 418,065 Nations Cash Reserves#............ $ 418,065 ---------- TOTAL INVESTMENTS (Cost $1,581,686*)....... 129.1% 1,643,176 ---------- OTHER ASSETS AND LIABILITIES (NET)........ (29.1)% Cash.............................. $ 16,948 Dividends receivable.............. 3,628 Interest receivable............... 224 Prepaid expenses.................. 29 Collateral on securities loaned... (376,256) Investment advisory fee payable... (815) Administration fee payable........ (51) Payable for investment securities purchased....................... (13,851) Accrued Trustees' fees and expenses........................ (10) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET)........................... (370,154) ---------- NET ASSETS................. 100.0% $1,273,022 ==========
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $61,490 on investment securities was comprised of gross appreciation of $150,392 and gross depreciation of $88,902 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $1,581,686. (!) Non-income producing security. + Amount represents less than 0.1%. ++ Amount represents less than $500. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 6). The portion that represents cash collateral is $376,256. ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 34 39 NATIONS MASTER INVESTMENT TRUST Nations International Value Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED) At September 30, 2000, sector diversification was as follows: % OF NET VALUE SECTOR DIVERSIFICATION ASSETS (000) - -------------------------------------------------------------------------------------------------- Common stocks: Telecommunications.......................................... 16.5% $ 211,164 Commercial banking.......................................... 10.8 136,864 Insurance................................................... 9.7 123,133 Integrated oil.............................................. 6.2 79,263 Beverages................................................... 4.9 62,241 Heavy machinery............................................. 4.8 61,256 Food products............................................... 4.6 59,019 Electric power -- Non nuclear............................... 4.3 55,085 Automotive.................................................. 3.7 47,036 Chemicals -- Specialty...................................... 3.0 38,692 Metals and mining........................................... 3.0 37,724 Diversified electronics..................................... 2.8 35,149 Department and discount stores.............................. 2.8 35,094 Networking and telecommunications equipment................. 2.4 30,130 Household products.......................................... 2.0 24,892 Diversified manufacturing................................... 1.9 24,185 Tobacco..................................................... 1.8 23,195 Aerospace and defense....................................... 1.7 21,816 Food and drug stores........................................ 1.6 20,367 Conglomerates............................................... 1.5 19,691 Steel....................................................... 1.3 16,245 Chemicals -- Basic.......................................... 1.2 15,607 Electrical equipment........................................ 1.1 14,064 Other....................................................... 1.3 15,657 ---------- ------------- TOTAL COMMON STOCKS......................................... 94.9 1,207,569 PREFERRED STOCKS............................................ 1.4 17,542 RIGHTS...................................................... 0.0+ 0++ INVESTMENT COMPANIES........................................ 32.8 418,065 ---------- ------------- TOTAL INVESTMENTS........................................... 129.1 1,643,176 OTHER ASSETS AND LIABILITIES (NET).......................... (29.1) (370,154) ---------- ------------- NET ASSETS.................................................. 100.0% $ 1,273,022 ---------- ------------- ---------- -------------
- --------------- + Amount represents less than 0.1%. ++ Amount represents less than $500. SEE NOTES TO FINANCIAL STATEMENTS. 35 40 NATIONS MASTER INVESTMENT TRUST Nations International Equity Master Portfolio STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 92.0% ARGENTINA -- 0.1% 58,263 Perez Companc SA, ADR(!)............ $ 955 ---------- AUSTRALIA -- 2.0% 50,000 Aristocrat Leisure Limited(!)....... 179 110,000 Broken Hill Proprietary Company, Ltd. ............................. 1,141 60,000 Computershare Limited............... 271 66,900 CSR Limited......................... 147 200,000 Foster's Brewing Group Ord.(!)...... 466 540,000 National Australia Bank Limited..... 7,458 153,392 News Corporation.................... 2,160 220,000 Qantas Airways Limited.............. 424 210,000 Rio Tinto Ltd. ..................... 2,815 98,686 The News Corporation Ltd. .......... 5,534 90,000 Woodside Petroleum Limited.......... 667 ---------- 21,262 ---------- BELGIUM -- 0.5% 130,273 Fortis.............................. 4,006 11,322 RTL Group........................... 1,227 ---------- 5,233 ---------- BRAZIL -- 1.1% 17,300 Brasil Telecom Part, ADR............ 1,008 61,500 Cemig CIA Energ, ADR................ 1,020 9,000 Companhia Vale Do Rio Doce (Cvrd)(!)......................... 224 74,367 Companhia Vale do Rio Doce, ADR..... 1,855 20,000 Embratel Participacoes SA........... 370 44,630 Embratel Participacoes, ADR......... 826 115,000 Petrol Brasileiros, ADR............. 3,291 54,500 Petroleo Brasileiro SA, ADR(!)...... 1,638 72,196 Tele Norte Leste Participacoes, ADR............................... 1,651 ---------- 11,883 ---------- CANADA -- 2.9% 87,479 Bank of Nova Scotia................. 2,544 200,000 Barrick Gold Corporation............ 3,049 85,926 BCE, Inc. .......................... 2,002 110,200 Bombardier, Inc. ................... 1,904 2,900 C-MAC Industries Inc.(!)............ 166 300 C-MAC Industries Inc.(!)............ 17 81,556 Canada Life Financial Corporation... 1,897 40,200 Canadian National Railway Company... 1,181 153,575 Nortel Networks Corporation......... 9,221 50,000 Petro - Canada...................... 1,113 78,000 Royal Bank of Canada................ 2,317 123,495 Sun Life Financial Services of Canada(!)......................... 2,549 35,819 Suncor Energy, Inc. ................ 790 51,900 Toronto - Dominion Bank............. 1,525 ---------- 30,275 ---------- CHILE -- 0.0%+ 8,189 Enersis, ADR(!)..................... 146 10,100 Telecom de Chile, ADR(!)............ 175 ---------- 321 ---------- DENMARK -- 0.3% 23,000 Den Danske Bank Group............... 2,922 ----------
VALUE SHARES (000) - ------------------------------------------------------------ FINLAND -- 1.8% 428,108 Nokia Oyj........................... $ 17,348 140,426 Stora Enso Oyj - R Shares........... 1,176 ---------- 18,524 ---------- FRANCE -- 10.1% 41,778 Alcatel............................. 2,673 100,000 Alcatel SA, ADR..................... 6,288 118,405 Aventis............................. 8,881 30,046 Aventis SA.......................... 2,339 47,291 Axa................................. 6,175 25,282 Banque Nationale de Paris (BNP)..... 2,229 59,847 Bouygues SA(!)...................... 3,016 4,891 Canal Plus.......................... 732 6,600 Carrefour SA........................ 487 4,755 Castorama Dubois.................... 1,049 46,643 Christian Dior(!)................... 2,513 15,012 Compagnie De Saint-Gobain........... 1,888 90,000 Compagnie Generale des Establessements Michelin.......... 2,502 14,493 Groupe Danone....................... 1,990 118,441 Havas Advertising(!)................ 1,871 26,223 L'Oreal SA(!)....................... 2,035 32,863 Lafarge - Coppee.................... 2,262 10,387 Pinault - Printemps - Redoute SA.... 1,829 37,960 Publicis Groupe..................... 1,159 138,302 Sanofi - Synthelabo................. 7,433 110,000 Societe Generale.................... 6,149 49,489 Societe Television Francaise 1...... 2,839 29,363 STMicroelectronics NV............... 1,439 198,921 Total Fina Elf SA................... 29,105 94,561 Usinor.............................. 859 83,545 Vivendi SA.......................... 6,208 ---------- 105,950 ---------- GERMANY -- 5.4% 15,543 Allianz AG.......................... 5,137 125,000 BASF AG............................. 4,440 75,000 Bayer AG............................ 2,773 205,789 Bayersche Motoren Werke AG.......... 7,083 60,000 DaimlerChrysler AG.................. 2,675 106,284 Deutsche Bank AG.................... 8,890 65,408 Deutsche Lufthansa AG............... 1,351 54,061 Deutsche Telekom AG (REGD).......... 1,887 25,569 Dresdner Bank AG.................... 1,125 27,153 E. On AG............................ 1,399 38,445 Kamps AG............................ 603 33,516 Metro AG............................ 1,372 25,430 SAP AG.............................. 6,238 14,115 SAP AG.............................. 2,715 80,000 SAP AG, ADR......................... 4,920 31,130 Siemens AG.......................... 4,004 ---------- 56,612 ---------- HONG KONG -- 3.3% 998,000 Cheung Kong (Holdings) Limited...... 12,064 757,000 China (HK) Mobile(!)................ 5,024 124,500 CLP Holdings........................ 559 78,700 Hang Seng Bank...................... 848 366,000 Hong Kong & China Gas(!)............ 458 480,000 Hong Kong Electric.................. 1,484
SEE NOTES TO FINANCIAL STATEMENTS. 36 41 NATIONS MASTER INVESTMENT TRUST Nations International Equity Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ HONG KONG -- (CONTINUED) 745,000 HSBC Holdings....................... $ 10,414 329,600 Hutchison Whampoa................... 4,376 ---------- 35,227 ---------- IRELAND -- 1.1% 146,619 Bank of Ireland..................... 1,171 106,479 CRH plc............................. 1,689 319,799 CRH plc Ord......................... 5,091 62,475 Elan Corporation plc(!)............. 3,501 10,305 Elan Corporation, ADR(!)............ 564 ---------- 12,016 ---------- ITALY -- 2.4% 88,553 Banca Fideuram SpA.................. 1,468 390,516 Banca Intesa SpA(!)................. 1,506 92,079 Bulgari SpA......................... 1,134 797,034 ENI SpA (REGD)...................... 4,220 17,945 Gucci Group NV...................... 1,815 182,690 Mediaset SpA........................ 2,721 62,593 San Paolo - IMI SpA................. 1,017 110,329 San Paolo - IMI SpA, ADR............ 3,593 261,796 Telecom Italia Mobile............... 2,116 524,034 Telecom Italia SpA.................. 5,568 ---------- 25,158 ---------- JAPAN -- 17.1% 6,000 Aiful Corporation................... 577 273,000 Asahi Chemical Industry Company, Ltd. ............................. 1,630 11,900 Asatsu - DK Inc. ................... 407 175,000 CANON Inc. ......................... 7,758 135,000 Daiwa Securities.................... 1,583 96 DDI Corporation..................... 633 67,000 Eisai Company, Ltd. ................ 2,114 165,000 Fuji Photo Film Company, Ltd. ...... 5,527 44,800 Fujisawa Pharmaceutical............. 1,650 219,800 Fujitsu............................. 5,105 13,300 Fujitsu Support Service............. 1,586 390,000 Hitachi, Ltd. ...................... 4,526 134,000 Honda Motor Company................. 4,935 104,000 Ito - Yokado Company, Ltd........... 5,418 31,000 Kao Corporation..................... 846 40,700 Kyocera Corporation................. 6,215 37,000 Lawson Inc. ........................ 1,397 600,000 Marubeni Corporation(!)............. 1,504 33,000 Matsushita Electric Industrial...... 864 700,000 Mitsubishi Heavy Industries, Ltd. ............................. 2,773 525,000 Mitsubishi Materials Corporation.... 1,628 222 Mizuho Holdings, Inc.(!)............ 1,828 60,000 Namco, Ltd. ........................ 1,665 279,774 NEC Corporation..................... 6,356 21,000 Nichicon Corporation................ 508 785,000 Nikko Securities Company, Ltd. ..... 6,973 51,500 Nintendo Company, Ltd. ............. 9,404 400,000 Nippon Express Company, Ltd. ....... 2,136 416,000 Nippon Steel Corporation............ 739 1,663 Nippon Telegraph and Telephone Company........................... 16,313 4,920 Nippon Television Network Corporation....................... 2,827 310,000 Nissan Motor Company, Ltd.(!)....... 1,779
VALUE SHARES (000) - ------------------------------------------------------------ JAPAN -- (CONTINUED) 73,000 Nomura Securities................... $ 1,588 150,000 Nsk Ltd.(!)......................... 1,067 246 NTT Docomo Inc. .................... 7,057 13,200 Orix Corporation(!)................. 1,578 7,200 Rohm Company........................ 1,973 34,000 Sanwa Bank.......................... 303 15,000 Secom Company....................... 1,206 153,700 Sharp Corporation................... 2,378 100,000 Shin - Etsu Chemical Company, Ltd. ............................. 4,210 30,900 Shinko Electric Industries.......... 1,315 105,000 Shiseido Company, Limited........... 1,304 16,300 Softbank Corporation................ 1,524 153,700 Sony Corporation.................... 15,589 163,700 Sumitomo Corporation................ 1,421 45,400 Sunkus & Associates Inc. ........... 1,210 63,000 Takeda Chemical Industries, Ltd. ... 4,163 45,000 Takefuji Corporation................ 4,957 425,000 The Bank of Tokyo - Mitsubishi, Ltd. ............................. 5,022 4,000 The Furukawa Electric Company, Ltd. ............................. 110 258,000 The Sumitomo Trust & Banking Company, Ltd. .................... 1,748 64,000 Tokyo Broadcasting System........... 2,576 52,000 Tokyo Electric Power Company........ 1,225 125,000 Toyota Motor Corporation............ 4,939 13,000 Trend Micro, Inc.(!)................ 1,746 ---------- 179,413 ---------- MEXICO -- 1.9% 484,340 Carso Global Telecom................ 1,167 585,667 Carso Global Telecom, ADR........... 2,822 150,533 Grupo Carso SA de CV, ADR(!)........ 901 87,902 Grupo Televisa SA, GDR(!)........... 5,071 163,869 Telefonos de Mexico, ADR............ 8,716 71,662 Walmart de Mexico SA de CV, ADR(!).. 1,499 ---------- 20,176 ---------- NETHERLANDS -- 8.1% 316,617 ABN AMRO Holding NV................. 7,375 51,247 Aegon NV............................ 1,933 160,374 Akzo Nobel NV....................... 6,765 147,900 ASM Lithography Holding NV(!)....... 4,907 44,545 Fortis (NL) NV(!)................... 1,364 41,687 Gucci Group, ADR.................... 4,205 38,223 Heineken NV......................... 2,125 294,238 ING Groep NV........................ 19,599 110,783 Koninklijke Ahold NV................ 3,142 403,434 Philips Electronics NV.............. 17,363 109,019 Royal Dutch Petroleum Company....... 6,589 175,000 Unilever NV, ADR.................... 8,444 3,100 Unilever NV, ADR.................... 15 71,420 Wolters Kluwer NV................... 1,450 ---------- 85,276 ---------- PORTUGAL -- 0.4% 410,000 Portugal Telecommunications, ADR.... 4,151 ---------- SINGAPORE -- 0.8% 351,000 Chartered Semiconductor(!).......... 2,239 205,895 DBS Group Holding Ltd. ............. 2,272 105,000 Fraser & Neave Ltd.(!).............. 362 534,000 Neptune Orient Lines(!)............. 479
SEE NOTES TO FINANCIAL STATEMENTS. 37 42 NATIONS MASTER INVESTMENT TRUST Nations International Equity Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ SINGAPORE -- (CONTINUED) 290,000 OMNI Industries..................... $ 458 101,850 Overseas - Chinese Banking Corporation Ltd. ................. 644 47,000 Sembcorp Logistics.................. 289 38,000 Singapore Airlines Ltd. ............ 360 6,000 Singapore Press Holdings, Ltd. ..... 90 340,000 Singapore Telecommunications........ 531 82,000 Venture Manufacturing Ltd. ......... 792 ---------- 8,516 ---------- SOUTH KOREA -- 1.8% 12,700 Housing and Commercial Bank......... 301 265,374 Korea Electric Power Corporation, ADR............................... 3,466 145,163 Korea Telecom, ADR.................. 4,881 45,334 Pohang Iron & Steel Company Ltd., ADR............................... 844 48,205 Samsung Electronics................. 8,732 17,670 SK Telecom Company, ADR............. 453 5,000 SK Telecom Company, Ltd., ADR(!).... 128 ---------- 18,805 ---------- SPAIN -- 3.4% 282,689 Banco Bilbao Vizcaya................ 4,271 112,000 Banco Popular Espanol SA............ 3,435 300,000 Endessa SA.......................... 5,639 303,607 Iberdrola SA........................ 3,858 130,395 Repsol, ADR......................... 2,399 325,000 Repsol - YPF SA, ADR................ 5,952 440,934 Telefonica SA....................... 8,735 18,074 Telefonica SA, ADR.................. 1,074 ---------- 35,363 ---------- SWEDEN -- 1.9% 3,201 ABB Ltd. ........................... 313 357,068 Investor AB......................... 5,060 522,789 LM Ericsson AB(!)................... 7,950 80,613 Sandvik AB(!)....................... 1,619 45,710 Securitas AB........................ 999 74,834 Skandia Forsakrings AB.............. 1,484 33,596 SKF AB.............................. 419 107,553 Svenska Handelsbanken AB............ 1,731 ---------- 19,575 ---------- SWITZERLAND -- 5.7% 15,453 ABB Ltd.(!)......................... 1,502 2,001 Compagnie Financiere Richemont AG... 6,014 14,688 Credit Suisse Group................. 2,745 668 Julius Baer Holdings, Ltd. ......... 3,465 980 Kudelski SA(!)...................... 1,500 5,637 Nestle SA........................... 11,740 6,159 Novartis AG......................... 9,443 331 Roche Holding AG.................... 2,911 2,103 Schweizerische Rueckversicherungs - Gesellschaft (REGD)............... 4,015 4,868 Serono SA - B(!).................... 5,943 2,645 The Swatch Group AG................. 780 2,332 The Swatch Group AG................. 3,373 15,717 UBS AG Registered................... 2,091 10,000 Zurich Allied AG.................... 4,623 ---------- 60,145 ----------
VALUE SHARES (000) - ------------------------------------------------------------ TAIWAN -- 0.4% 103,798 Advanced Semiconductor.............. $ 143 16,300 Asustek Computer Inc., GDR.......... 90 32 Asustek Computer, GDR(-)............ 0++ 19,800 Bank Sinopac........................ 11 30,000 Compeq Manufacturing Company, Ltd.(!)........................... 165 91,000 Hon Hai Precision Industry Company, Ltd. ............................. 598 87,200 Hon Hai Precision(!)................ 775 11,752 President Chain Store Corporation... 37 23,310 Synnex Technology International Corporation, GDR.................. 293 92,000 Taiwan Cellular Corporation(!)...... 223 234,880 Taiwan Semiconductor................ 780 15,361 Taiwan Semiconductor, ADR........... 313 308,000 United Microelectronics Corporation, Ltd. ............................. 659 4,000 United Microelectronics Corporation, Ltd.(!)........................... 48 ---------- 4,135 ---------- THAILAND -- 0.0%+ 26,700 Advanced Info Services (FGN)(!)..... 225 ---------- TURKEY -- 0.0%+ 26,000 Yapi ve Kredi Bankasi AS, GDR(!).... 184 ---------- UNITED KINGDOM -- 19.4% 218,159 3i Group............................ 5,428 316,000 Abbey National plc.................. 4,200 605,111 Aegis Group......................... 1,306 166,477 Allied Zurich plc................... 1,893 51,929 Amvescap............................ 1,124 255,803 Arm Holdings plc.................... 2,844 195,706 AstraZeneca Group plc............... 10,256 200,000 Azlan Group Ord.(!)................. 651 201,509 BAE Systems......................... 1,087 59,536 Barclays............................ 1,648 195,317 BG Group plc........................ 1,241 203,152 BOC Group plc....................... 2,688 1,512,190 BP Amoco............................ 13,459 55,000 British Airways plc, ADR............ 2,351 48,567 British Sky Broadcasting Group plc ("BSkyB")(!)...................... 747 605,392 British Telecommunications Ord. .... 6,364 199,073 Cable & Wireless plc................ 2,840 131,679 Capita Group plc.................... 1,168 425,418 Carlton Communications plc.......... 3,321 118,490 Cgnu plc............................ 1,682 30,738 Colt Telecom Group(!)............... 882 210,000 Corus Group plc, ADR................ 1,628 82,894 Daily Mail and General Trust - A NV................................ 1,197 718,435 Diageo plc.......................... 6,421 92,195 EMAP plc............................ 1,239 183,530 EMI Group plc....................... 1,465 58,196 Exel Ord. .......................... 933 277,080 Glaxo Wellcome plc.................. 8,389 656,620 Granada Compass plc(!).............. 6,125 82,506 Granada Media plc(!)................ 550 231,740 Hays................................ 1,348 331,170 HSBC Holdings....................... 4,710
SEE NOTES TO FINANCIAL STATEMENTS. 38 43 NATIONS MASTER INVESTMENT TRUST Nations International Equity Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ UNITED KINGDOM -- (CONTINUED) 204,000 Kingfisher plc...................... $ 1,333 85,942 Logica.............................. 2,827 92,567 Marconi plc......................... 1,266 965,000 Marks & Spencer plc................. 2,897 245,689 Misys plc........................... 2,307 216,053 National Grid Group plc............. 1,854 380,594 New Dixons Group plc................ 1,187 44,486 Pearson plc......................... 1,236 400,000 Peninsular and Oriental Steam Navigation Company................ 3,518 350,000 PowerGen plc........................ 2,683 120,962 Psion plc........................... 1,323 48,821 Rio Tinto plc....................... 708 167,910 Royal Bank of Scotland.............. 3,545 561,333 Scottish Power plc.................. 4,357 84,862 Seagram Company Ltd. ............... 4,874 166,800 Securicor plc....................... 345 2,419,342 Shell Transport and Trading Company........................... 19,708 729,233 Smithkline Beecham plc.............. 9,989 67,847 Smiths Industries plc............... 704 169,830 Spirent plc(!)...................... 1,682 831,803 Tesco plc........................... 3,056 466,460 Unilever............................ 3,021 6,242,614 Vodafone AirTouch plc............... 23,303 136,621 Williams plc........................ 667 379,268 WPP Group Ord. ..................... 4,542 ---------- 204,117 ---------- UNITED STATES -- 0.1% 800 BCE Inc. ........................... 19 27,870 BCE Inc. ........................... 651 ---------- 670 ---------- TOTAL COMMON STOCKS (Cost $921,362)................... 967,089 ---------- PREFERRED STOCKS -- 0.1% (Cost $810) JAPAN -- 0.1% 29,300 Tokyo Broadcasting Company(!)(-).... 1,205 ---------- RIGHTS -- 0.0%+ (Cost $0) CHILE -- 0.0%+ 3,107 Enersis SA, ADR Expire 10/12/00................... 1 ---------- WARRANTS -- 0.1% JAPAN -- 0.0%+ 8,000 Tokyo Broadcasting Company Expire 11/17/00(!)....................... 323 ---------- SOUTH KOREA -- 0.1% 35,800 Korea Electric Power Expire 04/27/01(!)....................... 934 ---------- TOTAL WARRANTS (Cost $1,274)..................... 1,257 ----------
SHARES VALUE (000) (000) - ------------------------------------------------------------ INVESTMENT COMPANIES -- 9.1% (Cost $96,000) 96,000 Nations Cash Reserves#............. $ 96,000 ---------- TOTAL INVESTMENTS (Cost $1,019,446*)........ 101.3% 1,065,552 ---------- OTHER ASSETS AND LIABILITIES (NET)..................... (1.3)% Cash............................... $ 65,808 Receivable for investment securities sold.................. 22,743 Receivable for Fund shares sold.... 2 Dividends receivable............... 2,107 Interest receivable................ 267 Receivable for variation margin.... 1,009 Collateral on securities loaned.... (37,499) Payable for Fund shares redeemed... (6) Investment advisory fee payable.... (680) Administration fee payable......... (42) Payable for investment securities purchased........................ (66,964) Accrued Trustees' fees and expenses......................... (8) Accrued expenses and other liabilities...................... (100) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET)............................ (13,363) ---------- NET ASSETS.................. 100.0% $1,052,189 ==========
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $46,106 on investment securities was comprised of gross appreciation of $118,181 and gross depreciation of $72,075 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $1,019,446. (-) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. (!) Non-income producing security. + Amount represents less than 0.1%. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 6). The portion that represents cash collateral is $37,499. ADR -- American Depository Receipt GDR -- Global Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 39 44 NATIONS MASTER INVESTMENT TRUST Nations International Equity Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED) At September 30, 2000, sector diversification was as follows: % OF NET VALUE SECTOR DIVERSIFICATION ASSETS (000) - -------------------------------------------------------------------------------------------------- Common stocks: Telecommunications services................................. 12.7% $ 133,425 Commercial banking.......................................... 9.8 103,371 Integrated oil.............................................. 8.4 88,264 Pharmaceuticals............................................. 6.6 68,960 Electronics................................................. 4.9 51,703 Insurance................................................... 3.0 31,388 Broadcasting and cable...................................... 2.9 30,305 Food products............................................... 2.7 28,869 Networking and telecommunications equipment................. 2.7 28,283 Automotive.................................................. 2.3 23,913 Investment services......................................... 2.1 21,756 Chemicals -- Basic.......................................... 2.0 20,829 Semiconductors.............................................. 1.9 19,868 Financial services.......................................... 1.9 19,599 Electric power -- Non nuclear............................... 1.9 19,566 Software.................................................... 1.8 19,030 Specialty stores............................................ 1.5 16,227 Leisure..................................................... 1.4 14,931 Diversified manufacturing................................... 1.4 14,741 Publishing and advertising.................................. 1.4 14,497 Other....................................................... 18.7 197,564 ---------- ------------- TOTAL COMMON STOCKS......................................... 92.0 967,089 PREFERRED STOCKS............................................ 0.1 1,205 RIGHTS...................................................... 0.0+ 1 WARRANTS.................................................... 0.1 1,257 INVESTMENT COMPANIES........................................ 9.1 96,000 ---------- ------------- TOTAL INVESTMENTS........................................... 101.3 1,065,552 OTHER ASSETS AND LIABILITIES (NET).......................... (1.3) (13,363) ---------- ------------- NET ASSETS.................................................. 100.0% $ 1,052,189 ========== =============
- --------------- + Amount represents less than 0.1%. SEE NOTES TO FINANCIAL STATEMENTS. 40 45 NATIONS MASTER INVESTMENT TRUST STATEMENTS OF OPERATIONS (UNAUDITED) For the six months ended September 30, 2000 INTERNATIONAL INTERNATIONAL VALUE EQUITY MASTER MASTER PORTFOLIO PORTFOLIO ------------------------------- (IN THOUSANDS) INVESTMENT INCOME: Dividends (Net of foreign withholding taxes of $1,439 and $1,259, respectively)..................................... $ 14,895 $ 11,439 Interest.................................................... 1,189 1,382 Securities lending income................................... 1,471 231 -------------- -------------- Total investment income................................. 17,555 13,052 -------------- -------------- EXPENSES: Investment advisory fee..................................... 4,919 3,869 Administration fee.......................................... 273 242 Custodian fees.............................................. 60 207 Legal and audit fees........................................ 30 32 Trustees' fees and expenses................................. 12 11 Interest expense............................................ -- 28 Other....................................................... 14 14 -------------- -------------- Total expenses.......................................... 5,308 4,403 Fees waived by investment advisor........................... (547) -- Fees reduced by credits allowed by the custodian............ (25) -- -------------- -------------- Net expenses............................................ 4,736 4,403 -------------- -------------- NET INVESTMENT INCOME....................................... 12,819 8,649 -------------- -------------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) from: Security transactions..................................... (4,592) 17,594 Futures contracts......................................... -- (264) Forward foreign exchange contracts, foreign currencies and net other assets........................................ (72) (664) -------------- -------------- Net realized gain/(loss) on investments..................... (4,664) 16,666 -------------- -------------- Change in unrealized appreciation/(depreciation) of: Securities................................................ 18,512 (144,974) Futures contracts......................................... -- (50) Forward foreign exchange contracts, foreign currencies and net other assets........................................ (56) (149) -------------- -------------- Net change in unrealized appreciation/(depreciation) of investments............................................... 18,456 (145,173) -------------- -------------- Net realized and unrealized gain/(loss) on investments...... 13,792 (128,507) -------------- -------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $ 26,611 $ (119,858) ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 41 46 NATIONS MASTER INVESTMENT TRUST STATEMENTS OF CHANGES IN NET ASSETS INTERNATIONAL VALUE INTERNATIONAL EQUITY MASTER PORTFOLIO MASTER PORTFOLIO -------------------------------- --------------------------------- SIX MONTHS SIX MONTHS ENDED ENDED 9/30/00 PERIOD ENDED 9/30/00 PERIOD ENDED (UNAUDITED) 3/31/00(a) (UNAUDITED) 3/31/00(b) ---------------------------------------------------------------- (IN THOUSANDS) Net investment income................................ $ 12,819 $ 6,583 $ 8,649 $ 406 Net realized gain/(loss) on investments.............. (4,664) 63,750 16,666 90,616 Net change in unrealized appreciation/(depreciation) of investments..................................... 18,456 39,265 (145,173) 105,272 -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets resulting from operations......................................... 26,611 109,598 (119,858) 196,294 Contributions........................................ 919,366 1,096,010 1,701,586 1,587,782 Withdrawals.......................................... (529,051) (349,512) (1,457,985) (855,630) -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets................ 416,926 856,096 123,743 928,446 NET ASSETS: Beginning of period.................................. 856,096 -- 928,446 -- -------------- -------------- -------------- -------------- End of period........................................ $ 1,273,022 $ 856,096 $ 1,052,189 $ 928,446 ============== ============== ============== ==============
SUPPLEMENTARY DATA
WITHOUT WAIVERS RATIO OF AND/OR EXPENSE OPERATING REIMBURSEMENTS EXPENSES --------------- RATIO OF INCLUDING RATIO OF NET RATIO OF OPERATING INTEREST INVESTMENT OPERATING EXPENSES EXPENSE INCOME/(LOSS) PORTFOLIO EXPENSES TO TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER AVERAGE NET ASSETS NET ASSETS NET ASSETS RATE NET ASSETS --------------------------------------------------------------------- INTERNATIONAL VALUE MASTER PORTFOLIO: Six months ended 9/30/2000 (unaudited).... 0.86%+ -- 2.34%+ 3% 0.97%+ Period ended 3/31/2000(a)................. 0.88+ -- 2.31+ 22 0.98+ INTERNATIONAL EQUITY MASTER PORTFOLIO: Six months ended 9/30/2000 (unaudited).... 0.90%+ 0.91%+ 1.78%+ 41% 0.91%+ Period ended 3/31/2000(b)................. 0.92+ 0.94+ 0.10+ 48 0.94+
- --------------- + Annualized. (a) International Value Master Portfolio commenced operations on October 18, 1999. (b) International Equity Master Portfolio commenced operations on October 8, 1999. SEE NOTES TO FINANCIAL STATEMENTS. 42 47 NATIONS MASTER INVESTMENT TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Nations Master Investment Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. At September 30, 2000, the Trust offered nine separate portfolios. These financial statements pertain only to International Value Master Portfolio and International Equity Master Portfolio (each a "Master Portfolio" and collectively, the "Master Portfolios"). Financial statements for the other portfolios of the Trust are presented under separate cover. The following investors were invested in the Master Portfolios at September 30, 2000: International Value Master Portfolio: Nations International Value Fund............ 98.1% Nations International Value Fund (Offshore)................................ 1.9% International Equity Master Portfolio: Nations International Equity Fund........... 99.1% Nations International Equity Fund (Offshore)................................ 0.9%
1. SIGNIFICANT ACCOUNTING POLICIES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Master Portfolios in the preparation of their financial statements. Securities valuation: Securities traded on a recognized exchange or on NASDAQ are valued at the last sale price on the exchange or market on which such securities are primarily traded. Securities traded only over-the-counter are valued at the last sale price, or if no sale occurred on such day, at the mean of the current bid and asked prices. Debt securities are generally valued by an independent pricing service. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as yield, type of issue, coupon rate, maturity and general market conditions. Restricted securities, securities for which market quotations are not readily available, and certain other assets may be valued under procedures adopted by the Board of Trustees. Short-term investments that mature in 60 days or less are valued at amortized cost, which approximates current market value. Foreign currency translation: The books and records of the Master Portfolios are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date of securities transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of a Master Portfolio and the amounts actually received. The effects of changes in foreign currency exchange rates on securities are not separately stated in the Statements of operations from the effects of changes in market prices of those securities, but are included with the net realized and unrealized gain or loss on securities. Forward foreign currency transactions: Generally, each Master Portfolio may enter into forward currency exchange contracts only under two circumstances: (i) when a Master Portfolio enters into a contract for the purchase or sale of a security denominated in a foreign currency, to "lock" in the U.S. exchange rate of the transaction, with such period being a short-dated contract covering the period between transaction date and settlement date; and (ii) when the investment adviser or sub-adviser believes that the currency of a particular foreign country may experience a substantial movement against the U.S. dollar. Forward foreign currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by a Master Portfolio as an unrealized gain or loss. When the contract is closed or offset with the same counterparty, a Master Portfolio records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed or offset. Forward foreign currency contracts will be used primarily to protect the Master Portfolio from adverse currency movements and will generally not be entered into for terms greater than one year. The use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of a Master Portfolio's investment securities; however, it does establish a rate of exchange that can be achieved in the future. The use of forward contracts involves the risk that anticipated currency movements will not be accurately predicted. A forward contract would limit the risk of loss due to decline in the value of a particular currency; however, it also would limit any potential gain that might result should the value of the currency increase instead of decrease. These contracts may involve market risk in excess of the unrealized gain or loss reflected in the Statements of net 43 48 NATIONS MASTER INVESTMENT TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) assets. In addition, the Master Portfolios could be exposed to risks if counterparties to the contracts are unable to meet the terms of their contracts. The counterparty risk exposure is, therefore, closely monitored and contracts are only executed with high credit quality financial institutions. Securities transactions and investment income: Securities transactions are accounted for on trade date. Realized gains and losses are computed based on the specific identification of securities sold. Interest income, adjusted for accretion of discounts and amortization of premiums, is earned from settlement date and recorded on an accrual basis. Dividend income is recorded on ex- dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Master Portfolios are informed of the ex-dividend date. Federal income taxes: The Master Portfolios are treated as partnerships for federal income tax purposes and therefore are not subject to federal income tax. Each investor in the Master Portfolios will be taxed on its allocated share of the Master Portfolio's ordinary income and capital gains. Expenses: General expenses of the Trust are allocated to the Master Portfolios based upon their relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Master Portfolio are charged to such Portfolio. The Master Portfolios may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Master Portfolios will accrue such taxes and recoveries as applicable, based upon their current interpretation of tax rules and regulations that exist in the markets in which they invest. 2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS The Trust has entered into an investment advisory agreement (the "Investment Advisory Agreement") with Banc of America Advisors, Inc. ("BAAI"), a wholly- owned subsidiary of Bank of America, N.A. ("Bank of America"), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, pursuant to which BAAI provides investment advisory services to the Master Portfolios. Under the terms of the Investment Advisory Agreement, BAAI is entitled to receive an advisory fee, calculated daily and payable monthly, based on the following annual rates multiplied by the average daily net assets of each Master Portfolio:
ANNUAL RATE ------ International Value Master Portfolio.......... 0.90% International Equity Master Portfolio......... 0.80%
The Trust has, on behalf on the International Value Master Portfolio, entered into a sub-advisory agreement with BAAI and Brandes Investment Partners, L.P. ("Brandes"), pursuant to which Brandes is entitled to receive a sub-advisory fee from BAAI at the maximum annual rate of 0.50% of the Master Portfolio's average daily net assets. The International Equity Master Portfolio is a "multi-manager" fund, which means that it is managed by more than one sub-adviser. Gartmore Global Partners ("Gartmore"), INVESCO Global Asset Management (N.A.), Inc. ("INVESCO") and Putnam Investment Management, Inc. ("Putnam") each manage approximately one-third of the assets of the Master Portfolio. Gartmore is a general partnership which is an indirect wholly-owned subsidiary of Nationwide Mutual Insurance Company. Pursuant to the sub-advisory agreement, Gartmore, INVESCO and Putnam are entitled to receive a fee from BAAI at the maximum annual rate of 0.65% of the first $60 million, 0.55% of the next $130 million, 0.45% of the next $200 million and 0.40% over $390 million of the Master Portfolio's average daily net assets under management. Prior to May 15, 2000, Gartmore received a sub-advisory fee from BAAI at the maximum annual rate of 0.70% of the Fund's average daily net assets. Stephens Inc. ("Stephens") and BAAI serve as co-administrators of the Trust. Under the co-administration agreements, Stephens and BAAI are currently entitled to receive a combined fee, computed daily and paid monthly, at the maximum annual rate of 0.05% of each Master Portfolio's average daily net assets. The Bank of New York ("BNY") serves as sub-administrator of the Trust pursuant to an agreement with BAAI. For the six months ended September 30, 2000, BAAI earned 0.05% from the average daily net assets of the Master Portfolios for its co-administration services. BNY serves as the custodian of the Trust's assets. For the six months ended September 30, 2000, expenses of the Master Portfolios were reduced by $25,345 under expense offset arrangements with BNY. The Master 44 49 NATIONS MASTER INVESTMENT TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) Portfolios could have invested a portion of the assets utilized in connection with the expense offset arrangements in an income producing asset if they had not entered into such arrangements. No officer, director or employee of Bank of America or BAAI, or any affiliate thereof, receives any compensation from the Trust for serving as a Trustee or officer of the Trust. The Trust's eligible Trustees may participate in non-qualified deferred compensation and retirement plans which may be terminated at any time. All benefits provided under these plans are unfunded and any payments to plan participants are paid solely out of the Master Portfolios' assets. Income earned on each plan participant's deferral account is tied to the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, to the rate of return of Nations Treasury Fund, a portfolio of Nations Fund, Inc., another registered investment company in the Nations Funds family. The expense for the deferred compensation and retirement plans is included in "Trustees' fees and expenses" in the Statements of operations. The Master Portfolios have made daily investments of cash balances in the Nations Cash Reserves, a portfolio of Nations Reserves, pursuant to an exemptive order received from the Securities and Exchange Commission. For the six months ended September 30, 2000, the Master Portfolios earned $1,980,514 in the aggregate from such investments, which is included in interest income. 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, excluding long-term U.S. government securities and short-term investments, for the six months ended September 30, 2000 were as follows:
PURCHASES SALES PORTFOLIO (000) (000) - ------------------------------------------------------- International Value Master Portfolio..................... $395,371 $ 31,337 International Equity Master Portfolio..................... 549,292 373,305
There were no purchases and sales of long-term U.S. government securities for the six months ended September 30, 2000. 4. FUTURES CONTRACTS At September 30, 2000, the following Master Portfolios had futures contracts open:
VALUE OF CONTRACT MARKET NUMBER WHEN VALUE OF UNREALIZED OF OPENED CONTRACTS DEPRECIATION DESCRIPTION CONTRACTS (000) (000) (000) - ----------------------------------------------------------------------- INTERNATIONAL EQUITY MASTER PORTFOLIO: Taiwan Index (long position) expiring December 2000(a).... 28 $411,650 $411,600 $(50)
- --------------- (a) Cash has been segregated as collateral for the International Equity Master Portfolio for open futures contracts. 5. LINES OF CREDIT The Trust participates with other Nations Funds in an uncommitted line of credit provided by BNY under a line of credit agreement (the "Agreement"). Advances under the Agreement are taken primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest on borrowings is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. Each participating Master Portfolio maintains a ratio of no less than 4 to 1 net assets (not including funds borrowed pursuant to the Agreement) to the aggregate amount of indebtedness pursuant to the Agreement. At September 30, 2000, there were no loans outstanding under this Agreement. For the six months ended September 30, 2000, borrowings by the Master Portfolios under the Agreement were as follows:
AVERAGE AMOUNT AVERAGE OUTSTANDING INTEREST PORTFOLIO (000) RATE - --------------------------------------------------------- International Equity Master Portfolio..................... $803 7.00%
The average amount outstanding was calculated based on daily balances in the period. The Trust also participates with other Nations Funds in a committed line of credit provided by BNY. Interest on borrowings under the committed line is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. A facility fee of 0.09% per annum of the total amounts available under the line of credit is charged, of which each Master Portfolio pays its pro rata share. This fee is paid quarterly in arrears. Each participating Master 45 50 NATIONS MASTER INVESTMENT TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) Portfolio is required to maintain an asset coverage ration of at least 300% under the terms of the arrangement. For the six months ended September 30, 2000, there were no borrowings by the Master Portfolios under the committed line of credit. 6. SECURITIES LENDING Under an agreement with BNY, the Master Portfolios can lend their securities to approved brokers, dealers and other financial institutions. Loans are collateralized by cash in an amount at least equal to the market value of the securities loaned. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Master Portfolios. Generally, in the event of counterparty default, the Master Portfolio has the right to use the collateral to offset losses incurred. There would be a potential loss to the Master Portfolio in the event the Master Portfolio is delayed or prevented from exercising its right to dispose of the collateral. The Master Portfolio bears the risk of loss with respect to the investment of collateral. At September 30, 2000, the following Master Portfolios had securities on loan:
MARKET VALUE OF MARKET VALUE LOANED SECURITIES OF COLLATERAL PORTFOLIO (000) (000) - ------------------------------------------------------------ International Value Master Portfolio....... $354,451 $376,256 International Equity Master Portfolio....... 35,370 37,499
7. REORGANIZATIONS CONVERSION OF COMMON TRUST FUNDS On May 12, 2000, the International Equity Fund (the "Acquiring Fund"), acquired the assets of Bank of America Common Trust International Equity Fund, a common trust fund, managed by Bank of America, N.A., (the "Acquired Fund"), in a tax-free exchange for shares of the Acquiring Fund. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. Net assets and unrealized appreciation as of the conversion date were as follows:
TOTAL NET ACQUIRED TOTAL NET TOTAL NET ASSETS OF FUND ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED ACQUIRED FUND ACQUIRING FUND AFTER CONVERSION APPRECIATION (000) (000) (000) (000) - ---------------------------------------------------------------- $29,129 $868,368 $897,497 $5,808
On September 8, 2000, the International Equity Fund (the "Acquiring Fund"), acquired the assets and liabilities of Nations International Growth Fund (the "Acquired Fund"), in a tax-free reorganization in exchange for shares of the Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired Fund's shareholders. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. The Acquiring Fund contributed the securities and other assets to the International Equity Master Portfolio for an interest in the Master Portfolio. Net assets and unrealized appreciation as of the reorganization date were as follows:
TOTAL NET ACQUIRED TOTAL NET TOTAL NET ASSETS OF FUND ASSETS OF ASSETS OF ACQUIRING FUND UNREALIZED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION (000) (000) (000) (000) - ----------------------------------------------------------------- $38,052 $1,023,391 $1,061,443 $8,549
46 51 P.O. Box 34602 Charlotte, NC 28254-4602 Toll free 1.800.321.7854 NATIONS FUNDS INTSTKSAR (9/00) -----END PRIVACY-ENHANCED MESSAGE-----